Determine the cost of this loan after taxes as percentage

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You are the CFO of a relatively small firm wishing to borrow 500,000 euros for an expansion project you plan to execute in France. This project is expected to take 6 months to complete, at which time your firm will repay the 500,000 euros plus the expected interest rate of 4%. Your firms USA marginal tax rate is 35%. The current exchange rate is $1.08/? and the 6 month spot rate is $1.11/?. Determine the cost of this loan (in US$ ) after taxes as a percentage.

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Reference no: EM131073260

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