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 5.385% 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...