please answer a,b,and c with all steps shown
East Aalatie- Thailand. The Easi Asiate Compary (EAC). a Danish oompany with mubsicaries throughout Aeia. has been funding dis Barykok auksitiay Pte I-par perod. 1-your loans are 12.03 th in baht. a. Arsuming enpected infiation rales lor the coming year of 4.4% and 1.25% in that and and the United States, respectively, according lo purchase power party, what would be the ehfective cost of funds in Thai baht tenms? b. If EAcru foreign wachange advisers belleve strongly that the Thal govemment wants to push the value of the baht down against the dollar by 5% over the coming year (lo promote ds exgot compelitveness in dollar markets) what might be the effective cost of funds in baht terma? e. If eAC cousd borow Thal baht at 13 0olw per annum, would this be cheaper than either part (a) or part (b)? a. Aasuming fispected inflaton rates for the coming year of 4.4% and 1.25% in Thalland and the United States, fespectively, according to purchase poiner parleg. what wosidd be the efective cost of funds in Thai baht tenms? Tre effective cost of funds, in baht iems, is (Round to three decimai places). East Asiatic-Thailand, The East Asiatio Company (EAC), a Danish compary with subsidiaries throughout Asia, has boen funding its Bangkok subsidiary primarly with U.S, dollar debt because of the cost and divallability of dollar capital as opposed to Thai baht-danominated (THB) debt, The treasurer of EAC-Thalland is considering a 1-year bank loan for USD249,000, The curtent ipot rete is THB32.05 = USD1.00, and the dollar-based interest is 6.77% for the 1-yoar penod. 1-yoar lotens aro 12.03% in baht. a. Assurting expected infintion rates for the coming yoar of 4.4%5 and 1.25% in Thailand and the Unickd State5, reapectrvely, itccording to purchase pewer. parity, what would be the offective cost of fonds in That baht toms? b. If EAC s foreign exchange advisers believe strongly that the Thai government wants lo push the value of the baht down against the dolfar by 5% over the coming year (to promote lts export oompetitiveness in dollar makets), what might be the effective cost of funds in baht terms? c. If EAc could borrow Thai baht at 13.00% per annum, would this be cheaper than either part (a) or part (b)? 8. Assuming expected inflation rates for the coming year of 4.4% and 1.2.5\% in Thalland and the United 8 taten, teapectively, according to purchase power parity, what would be the eftective cost of funds in Thai baht tems? The effectivo cost of funds, in baht tarms, is W. (Round to threa decimai places.) East Asistic-Thailand. The East Asiatic Company (EAC), a Danish company with subsidiaries throughout Asia, has been funding its Bangkok subsidiary primaily with U.S. dollar dobt because of the cost and mvailablity of dollar capital as opposed to Thai baht-denominated (THB) debt. The treasurer of EAc.Thatand is considering a t-year bank loan for USD249,000. The current spot rate is THB32.05 = USD1.00, and the dollar-based interest is 6.77\%s for. the 1-year period, 1-year ioans are 12.03% in baht a. Askurning expected inflation rates for the coming year of 4.4% and 1.25%6 in Thaland and the United States, respectively, according to purchase power parity, what would be the effective cost of funds in Thai baht tems? b. If EAC's foreign exchange advisers believe strongly that the Thai government wants to push the value of the baht down against the doliar by 5% over the coming year (to prompte its export compettiveness in dollar markets). what might be the effective cost of funds in baht terms? c. If EAc could bortow Thai baht at 13.00% per annum, would this be cheaper than either part (a) or part (b)? a. Assuming expected inhation rates for the coming year of 4.4% and 1.25% in Thailand and the Unted States, respectively, according to purchase power parith what would be the eflective cost of funds in Thai baht terms? The effective cost of funds, in baht terms. is (Round to three decimal places.)
