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Lat-Blue International Corp is considering different financing strategies for its new subsidiary in Mexico. The capital needed is 200 million pesos for 10 years. The
Lat-Blue International Corp is considering different financing strategies for its new subsidiary in Mexico. The capital needed is 200 million pesos for 10 years. The interest rates for 10-year peso denominated loans is 11% while the interest rates for 10-year dollar denominated loans is 7%. Should the company borrow in dollar? Discuss the pros and cons of borrowing in dollar (relative to borrowing in pesos)
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