Question: please answer all a,b,c,d Foreign Exchange Risk and the Cost of Borrowing Swiss Francs. The chapter demonstrated that a firm borrowing in a foreign currency
please answer all a,b,c,d
Foreign Exchange Risk and the Cost of Borrowing Swiss Francs. The chapter demonstrated that a firm borrowing in a foreign currency could potentially end up paying a very different effective rate of interest than what it expected. Using the same baseline values of a debt principal of SF1.6 million, a one-year period, an initial spot rate of SF1.4800/\$, a 5.182% cost of debt, and a 32% tax rate, what is the effective after-tax cost of debt for one year for a U.S. dollar-based company if the exchange rate at the end of the period was: a. SF1.4800/\$ b. SF1.4000/\$ c. SF1.3350/\$ d. SF1.6040/\$ a. If the exchange rate at the end of the period was SF1.4800/\$, what is the effective after-tax cost of debt? \% (Round to four decimal places.) Foreign Exchange Risk and the Cost of Borrowing Swiss Francs. The chapter demonstrated that a firm borrowing in a foreign currency could potentially end up paying a very different effective rate of interest than what it expected. Using the same baseline values of a debt principal of SF1.6 million, a one-year period, an initial spot rate of SF1.4800/\$, a 5.182% cost of debt, and a 32% tax rate, what is the effective after-tax cost of debt for one year for a U.S. dollar-based company if the exchange rate at the end of the period was: a. SF1.4800/\$ b. SF1.4000/\$ c. SF1.3350/\$ d. SF1.6040/\$ a. If the exchange rate at the end of the period was SF1.4800/\$, what is the effective after-tax cost of debt? \% (Round to four decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
