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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 CHF1.3 million, a one-year period, an initial spot rate of CHF 1.3000=$1.00, a 4.37% cost of debt, and a 35% tax rate, what is the effective 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. CHF1.3000=$1.00?
b. CHF1.2360=$1.00?
c. CHF1.1220=$1.00?
d. CHF 1.4470=$1.00?
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