Question

A U.S. company needs to borrow $100 million for a period of seven years. It can issue dollar debt at 7% or yen debt at 3%.
a. Suppose the company is a multinational firm with sales in the United States and inputs purchased in Japan. How should this affect its financing choice?
b. Suppose the company is a multinational firm with sales in Japan and inputs that are determined primarily in dollars. How should this affect its financing choice?



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  • CreatedJune 27, 2014
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