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Assume the following information for Vermont Co., a U.S-based MNC that needs funding for a project in Germany: a = = U.S. risk-free rate German

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Assume the following information for Vermont Co., a U.S-based MNC that needs funding for a project in Germany: a = = U.S. risk-free rate German risk-free rate Risk premium on dollar-denominated debt provided by U.S. creditors = Risk premium on euro-denominated debt provided by German creditors = Beta of project Expected U.S. market return U.S. corporate tax rate German corporate tax rate 4% 5% 3% 4% 1.2 10% 30% (federal and state combined) 40% = = = What is Vermont's after-tax cost of euro-denominated debt? a. 8.0 percent Ob.5.6 percent Oc.4.9 percent Od.5.4 percent

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