Dvr inc can borrow dollars for five years at a coupon rate


DVR, Inc. can borrow dollars for five years at a coupon rate of 2.75 percent. Alternatively, it can borrow yen for five years at a rate of .85 percent. DVR prefers dollar borrowing. The five-year yen swap rates are .64--.70 percent and the dollar swap rates are 2.41--2.44 percent. Illustrate how currency swap helps DVR lower its dollar borrowing cost.

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Financial Management: Dvr inc can borrow dollars for five years at a coupon rate
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