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Boeing, a U.S. aircraft company, needs to borrow EUR50 million for 10 years to invest in a logistic distribution network in Europe. Airbus, a European

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Boeing, a U.S. aircraft company, needs to borrow EUR50 million for 10 years to invest in a logistic distribution network in Europe. Airbus, a European aircraft company, needs to borrow USD 10 million for 10 years to initiate an expansion project in the U.S. The current spot exchange rate is EUR 5/USD. The following table shows the borrowing costs these two companies face: CONTINUE (2) Both companies decide to enter a currency SWAP contract and agree to split the potential cost-saving equally. What should be the cost of borrowing in terms of interest rate (EUR) after the SWAP for Boeing? \% (Please keep two decimal places. For example, please type in 9.10 in the box if your answer is 9.1%.) (1 mark) Boeing, a U.S. aircraft company, needs to borrow EUR50 million for 10 years to invest in a logistic distribution network in Europe. Airbus, a European aircraft company, needs to borrow USD 10 million for 10 years to initiate an expansion project in the U.S. The current spot exchange rate is EUR 5/USD. The following table shows the borrowing costs these two companies face: CONTINUE (2) Both companies decide to enter a currency SWAP contract and agree to split the potential cost-saving equally. What should be the cost of borrowing in terms of interest rate (EUR) after the SWAP for Boeing? \% (Please keep two decimal places. For example, please type in 9.10 in the box if your answer is 9.1%.) (1 mark)

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