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 SF 1.7 ?million, a? one-year period, an initial spot rate of SF 1.4600/$, a 4.919?% cost of? debt, and a 32% 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.SF1.4600?/$

b. SF1.4100/$

c. SF1.3560?/$

d. SF1.5950?/$