Suppose the euro is expected to depreciate against the dollar by 2% annually and the 10-year franc interest rate is 11%.What is the after-tax expected dollar cost of issuing a 10-year franc bond if the French corporate tax rate is 40%?
A) 5.93%
B) 7.61%
C) 4.47%
D) 6.60%
Correct Answer:
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