International Financial Management 2nd Edition by Geert Bekaert ,Robert Hodrick

تمرين 5

Which is a better deal: borrowing at 1% in yen when the risk-free yen interest rate is 3% and the firm's market-debt rate is 4%, or borrowing in euros at 3% when the risk-free euro interest rate is 5% and the firm's market-debt rate is 6% Assume that uncovered interest rate parity holds and that the corporate tax rate is 34%.