Question
Roo-Fus Inc is considering financing its international expansions by borrowing in the international debt markets. The current annualized 30day LIBOR rate is 4.2%. Roo-Fus Inc
Roo-Fus Inc is considering financing its international expansions by borrowing in the international debt markets. The current annualized 30day LIBOR rate is 4.2%. Roo-Fus Inc expects that the next period's 30-day LIBOR is 9.6%. Roo-Fus Inc's credit rating implies that it will face a 1.7% premium over LIBOR. What are Roo-Fus Inc's (annualized) borrowing costs?
Select one:
a. This period: 5.9%. Next period: 11.3%
b. This period: 5.9%. Next period: 5.9%
c. This period: 11.3%. Next period: 11.3%
d. This period: 4.2%. Next period: 9.6%
e. This period: 4.2%. Next period: 4.2%
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