Cemex, a cement company from Mexico that evaluates all business results, including financing costs, in U.S. dollars.This is done even though the firm is a Mexican corporation; they have significant exposure to the U.S. market.They are listed on the Mexican stock exchange, but have Level III ADRs in the U.S.The company needs to borrow $100,000,000 or the foreign currency equivalent for six years.For all issues, interest is payable once per year, at the end of the year.Available alternatives are listed

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A.Sell Japanese yen bonds at par yielding 3.65% per annum.The current exchange rate is 105.5/$, and the yen is expected to strengthen against the dollar by 1.75% per annum.

B.Sell euro-denominated bonds at par yielding 6.75% per annum.The current exchange rate is $1.1945/, and the euro is expected to weaken against the dollar by 1% per annum.

C.Sell U.S. dollar bonds at par yielding 5.5% per annum.

If the firm currently has bonds outstanding totaling $200,000,000 with an average pretax cost of debt of 6.18%.If the company's average tax rate is 28% what is the new average after-tax cost of debt?