Assume hypothetically (for this question only) that the blended interest rate and terms of borrowing the necessary
Question:
Assume hypothetically (for this question only) that the blended interest rate and terms of borrowing the necessary funds denominated in USD and Country B currency were identical. Assume that the only differences between the two alternatives are (1) who the borrower if record is and (2) the currency in which the payments must be made. If PHISH Oil Co.'s speculative projection of the exchange rate trend between USD and Country B currencies actually came true:
What would be the consequences of the expected currency shift on PHISH Oil Co. if they had selected the USD-denominated debt facility?
What would be the consequences of the expected currency shift on PHISH Co. if they had selected the Country B-denominated debt facility?
International Economics
ISBN: 978-1429278447
3rd edition
Authors: Robert C. Feenstra, Alan M. Taylor