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Determining the borrowing costs

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A MNC has been looking at borrowing in the international debt markets. It notices that the current 30-day London interbank offer rate is 4.3% (all rates are stated on an annualized basis). The MNC predicts that the next period's 30 day LIBOR is 7.2%. The MNC's credit rating implies that it will face a 1.6% premium over LIBOR. What re its borrowing costs (on an annualized basis)?

Select one:

a. This period: 5.90000. Next period: 5.90000

b. Not enough information

c. This period: 4.30000. Next period: 4.30000

d. None of these options is correct

e. This period: 4.30000. Next period: 7.20000

f. This period: 5.90000. Next period: 8.80000

g. This period: 8.80000. Next period: 8.80000

Reference no: EM132509169

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