Question: i) Calculate the year end exchange rate that makes borrowing in Malaysia and US indifferent. (4 marks) The United States Multinational subsidiary company located in

i) Calculate the year end exchange rate that makes borrowing in

i) Calculate the year end exchange rate that makes borrowing in Malaysia and US indifferent. (4 marks)

The United States Multinational subsidiary company located in Malaysia could borrow oneyear short-term financing in Malaysia at 6% or in the United States at 7%. The spot exchange rate is MYR3.2020/USD and by the end of the year, MYR is expected to depreciate by 0.6%. The corporate tax for that year is 30%

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