Solve A-D

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 SF15 million a one-year period an initial spot rate of SF1.5000/s, a 5.000% cost of debt, and a 34% 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. SF 1.5000/5 b. SF1.4400/5 c. SF13860/5 d. SF1.6240/5 a. If the exchange rate at the end of the period was SF15000/, what is the effective after-tax cost of debt? % (Round to four decimal places.)