What is the cost of dollar-denominated debt for this firm

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Assume the following information for a U.S.-based MNC that is considering obtaining funding for a project in France: U.S. risk-free rate = 2% France risk-free rate = 5% Risk premium on dollar-denominated debt provided by U.S. creditors = 3% Risk premium on euro-denominated debt provided by French creditors = 4% Beta of the project with respect to the U.S. stock market = 1.2 Beta of the project with respect to the French stock market=2.25 Expected U.S. stock market return = 7% Expected French stock market return=9% U.S. corporate tax rate = 30% French corporate tax rate = 40% What is the cost of dollar-denominated debt for this firm?

Reference no: EM131178150

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