International financing

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9. A U.S. company needs to borrow $100 million for a period of seven years. It can issue dollar debt at 7 percent or yen debt at 3 percent.

a. Suppose the company is a multinational firm with sales in the United States and inputs purchased in Japan. How should this affect its financing choice?

b. Suppose the company is a multinational firm with sales in Japan and inputs that are primarily determined in dollars. How should this affect its financing choice?

 

Reference no: EM1359361

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