ZAB Corporation can borrow at 5.5% after taxes in the United States. They estimate their Cost of Equity at 16%. Their target Capital Structure is 60% Debt and 40% Equity. They are considering financing a 6-year project in Belgium and will borrow EUR 40 Million which be paid back by retaining EUR 8 Million from the cash flow of the project in each of the 6 years of the project.

In this case the foreign financing of the project is more expensive than the domestic financing.

True or False?