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 SF1.5300 /$, a 4.831 % cost of debt, and a 40 % 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. SF1.5300 /$

b. SF1.4600 /$

c. SF1.4060 /$

d. SF1.6220 /$

a. If the exchange rate at the end of the period was SF1.5300 /$, what is the effective after-tax cost of debt? 2.8986 % (Round to four decimal places.)

b. If the exchange rate at the end of the period was SF1.4600 /$, what is the effective after-tax cost of debt? 5.9143 % (Round to four decimal places.)

c. If the exchange rate at the end of the period was SF1.4060 /$, what is the effective after-tax cost of debt? % (Round to four decimal places.)

d if the exchange rate at the end of the period was SF 1.6220/$, what is the effective after-tax cost of debt? $ (Round to four decimal places.)

!!! I am not able to figure out c and d, I keep on getting wrong answers, please help!!