The Dollar Cost of Debt for John Galt Industries Is

question 25

Multiple Choice

The dollar cost of debt for John Galt Industries is 8.0%.The firm faces a tax rate of 40% on all income,no matter where it is earned.Galt needs to know its Yen cost of debt.The risk-free interest rates on dollars and yen are r% = 6% and r¥ = 2%,respectively.Galt is willing to assume that capital markets are internationally integrated and that its free cash flows are uncorrelated with the yen-dollar spot rate.Galt's after-tax cost of debt in yen is closest to:

• A)0.9%
• B)2.0%
• C)3.9%
• D)4.8%

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Definitions:

Enterprise Levels

refers to the different layers or strata within an organization or business, including strategic, operational, and tactical levels, each with specific roles and responsibilities.

Employer Associations

Organizations formed by employers to promote their collective interests, typically in labor negotiations and public policy advocacy.

Union Leadership

Refers to individuals or a group of individuals who are elected or appointed to govern and represent a labor union, making decisions and acting as intermediaries between the union's membership and employers.

Rank and File

The regular members of an organization, particularly in military or labor union contexts, as distinct from the leadership or command structures.