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What is the effective? after-tax cost of debt for one year

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Question - 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 SF1.4700/$, a 5.458% cost of? debt, and a 40?% 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?

Reference no: EM132941004

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