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Swissie Debt Costs. The chapter demonstrated that a firm borrowing in a foreign currency could potentially end up paying a very different effective rate of
Swissie Debt Costs. 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 CHF million, a oneyear period, an initial spot rate of CHF $ a cost of debt, and a tax rate, what is the effective cost of debt for one year for a US dollarbased company if the exchange rate at the end of the period was:
a CHF$
b CHF$
c CHF$
d CHF $
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