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find a b c and d Foreign Exchange Risk and the Cost of Borrowing Swiss Francs. The chapter demonstrated that a firm borrowing in a
find a b c and d
Foreign Exchange Risk and the Cost of Borrowing Swiss Francs. The chapter demonstrated that a firm borrowing in a foreign currency could potentially end up paying a very different effective rate of interest than what it expected. Using the same baseline values of a debt principal of SF1.3 million, a one-year period, an initial spot rate of SF1.5400/$, a 4.733% cost of debt, and a 30% tax rate, what is the effective after-tax cost of debt for one year for a U.S. dollar-based company if the exchange rate at the end of the period was: a. SF1.5400/$ b. SF1.4600/$ c. SF1.4060/$ d. SF1.6750/$ a. If the exchange rate at the end of the period was SF1.5400/$, what is the effective after-tax cost of debt? % (Round to four decimal places.)Step by Step Solution
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