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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

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 SF1.3million, a one-year period, an initial spot rate of SF1.5000/$, a 4.705% cost of debt, and a 38% tax rate, what is the effective after-tax cost of debt for one year for a U.S. dollar-based company if the exchange rate at the end of the period was:
a. SF1.5000/$
b. SF1.4300/$
c. SF1.3980/$
d. SF1.6350/$

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