HELP, I need the steps and not in EXCEL Assume the following information for a U

Question

HELP, I need the steps and not in EXCEL

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?

Explanation / Answer

Details Amt $ US Risk Free rate   2% Risk Premium on $ denominated debt= 3% Total Pre Tax cost of $ denominated Debt 5% Tax rate in US =30% Post Tax cost of $ denominated debt=5%*(1-0.3)= 3.50% So post tax cost of $ denominated debt =3.5%

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