Monday, October 24, 2011

A8. (Domestic versus Eurobond borrowing costs) A firm can issue an eight-year public debt issue at par with an 11% coupon in the domestic market

FINANCE

A8. (Domestic versus Eurobond borrowing costs) A firm can issue an eight-year public debt issue at par with an 11% coupon in the domestic market. It can also issue 11.25% Eurobonds. If all other expenses are equal, which issue offers the firm the lower borrowing cost?

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