East Asiatic-Thailand. The East Asiatic Company (EAC), a Danish con?pany with subsidiaries throughout Asia, has been funding its Bangkok subsidiary prienarily with US dolar debt because of the cost and availability of dollar capital as opposed to Thai baht-denominated (B) debs. The treasurer of EAC. Thailand is considering a 1 -year bank boan for $251 , 000 . The current spot rate is B32 03/\$, and the dollar-based interest is 6.78% for the 1 -year period 1 -year loans are 11.96% in baht a. Assuming expected inflation rates for the coming year of 4.1% and 1.21% in Thailand and the United States, respectively, according to purchase power parity, what would be the effective cost of funds in Thai baht terms? b. If EAC's foreign exchange advisers befieve strongly that the Thai government wants to pesh the value of the baht down against the dollar by 5% over the coming year (to promote its export competitiveness in dollar markets), what might be the effective cost of funds in baht terms? c. If EAC could bortow Thal baht at 13.00% per annam, would this be cheaper than elther part a of part b? a. Assuming expected inflation rates for the cotaing yoar of 4.1% and 1.21% in Thailand and the Uniled States, respectivedy, accoeding to purchase powot parity, what would be the effective cost of funds in Thai baht terras? The effective cost of tunds, in baht terms, is \%. (Round to three decimal places )