The Bloomberg website (www.bloomberg.com) provides interest rate data for many countries and various maturities. Click on "Rates \** Bonds." Assume that an MNC would pay 1 percent more on borrowed funds than the risk-free (government) rates shown on the Bloomberg website. Determine the cost of debt (use a 10 -year maturity) for the U.S. parent that borrows dollars. Click on Japan and determine the cost of funds for a foreign subsidiary in Japan that borrows funds locally. Then click on Germany and determine the cost of debt for a subsidiary in Germany that borrows funds locally. Offer some explanations as to why the cost of debt may vary among the three countries.
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