Suppose Intel wishes to raise $1 billion and is deciding between a domestic dollar bond...
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- Suppose Intel wishes to raise $1 billion and is deciding between a domestic dollar bond issue and a Eurobond issue. The US bond can be issued at 1-year maturity with a coupon of 4.5% paid annually. The underwriting, registration and other fees total 1% of the issue size. The Eurobond carries a lower annual coupon of 4.25% but the total costs of issuing the bond runs 1.25% of the issue size. Which loan has the lower AIC?
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