East Asiatic - Thailand. The East Asiatic Company (EAC), a Danish company with subsidiaries throughout Asia, has beon funding its Bangkok awbsidiary primanty with U.S. dollar debt because of the cost and availability of dellar capital as opposed to Thal baht-denominaled (B) debl. The treasurer of EAC-Thaland is considering a 1 - pear bank loan for $250,000. The current spot rate is B32 07/5, and the dollar based interest is 6.795 for the 1 -yoar penod. 1 -year loans are 12.05% in baht a. Assuming expected inflation rates for the coming year of 4.3% and 1.23% in Thalland and the Unted Statea, respectively, according ta purchase power perity, what would be the effective cost of funds, in Thai baht terms? b. If EAC's foroign exchange advisers betieve strongy thet the Thai govemment wants to pust the value of the baht down againat the dolar by 5% over sele coming year (to promote its export competivoness in dollar markets), what might be the eflective cont of funds in baht lems? c. If EAC could borrow Thai baht at 13.00% per annum, would this be cheaper than either part a or pan b? a. Assuming expoctod inflation rates for the coming yoar of 4.35 and 1.23% in Thailand and the Unied Sutes, respectively, acconding to purchasn power panty what would be the effective cost of funds in Thai baht tecros? The eflectre cost of tunds, in baht terms, is \%. (Rround to three docmal places)