Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Siam Cement suffered enormous losses during the Asian currency crisis in 1 9 9 7 . When the Thai Baht was devalued from B 2

Siam Cement suffered enormous losses during the Asian currency crisis in 1997. When the Thai Baht was devalued from B25.5/$, Siam's interest payments were over $900 million on its outstanding dollar debt (with an average interest rate of 8.1% on its U.S. dollar debt at that time). Assuming Siam took out $53 million in debt in June 1997 and at 8.01% interest, and had to repay it in one year when the spot had risen to B42.2/$, what was the foreign exchange loss incurred on the transaction?
$956,793,100
$955,996,510
B855,996,510
B956,793,100
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions