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 SF1.7 million, a one-year period, an initial spot rate of SF1.4900/\$, a 5.357% cost of debt, and a 36% 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. SF1.4900/\$ b. SF1.4500/\$ c. SF1.4180/\$ d. SF1.6250/\$ a. If the exchange rate at the end of the period was SF1.4900/\$, what is the effective after-tax cost of debt? \% (Round to four decimal places.)