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The Copper Mountain company in Boulder, Colorado (US) borrows 2,000,000 for one year at 5.25% interest. The current exchange rate is 0.79 per US dollar.
- The Copper Mountain company in Boulder, Colorado (US) borrows 2,000,000 for one year at 5.25% interest. The current exchange rate is 0.79 per US dollar.
What is the cost (expressed in % terms) of this debt (from the dollar perspective) if the pound depreciated 5%?
What is the cost (expressed in % terms) of this debt (from the dollar perspective) if the pound appreciates 5%?
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