The Bloomberg website provides interest rate data for many countries and various maturities. Its address is http://www.bloomberg.com
Question:
The Bloomberg website provides interest rate data for many countries and various maturities. Its address is http://www.bloomberg.com.
Go to the Markets section and then to Bonds and Rates. Assume that an MNC would pay 1 percent more on borrowed funds than the risk-free (government) rates shown at the Bloomberg website. Determine the cost of debt (use a 10-year maturity) for the U.S. parent that borrows dollars. Click on Japan and determine the cost of funds for a foreign subsidiary in Japan that borrows funds locally. Then click on Germany and determine the cost of debt for a subsidiary in Germany that borrows funds locally. Offer some explanations as to why the cost of debt may vary among the three countries.
Cost Management Measuring Monitoring and Motivating Performance
ISBN: 978-0470769423
2nd Canadian edition
Authors: Leslie G. Eldenburg, Susan Wolcott, Liang Hsuan Chen, Gail Cook