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Solving for the Cross Rate and Call Premium

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Questions:

1. The Swiss franc is selling for $.7681 and the British pound is selling for $1.6581. The cross rate between the franc and the pound is what?

2. Buchanan Corp. is refunding $12 million worth of 10% debt. The corporation's tax rate is 35%. The call premium is 9%. What is the net cost of the call premium?

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This solution solves for the cross rate and call premium.

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1.
USD/ Swiss franc = 0.7681
USD/ British pound = 1.6581
(USD = US dollars)
Therefore, Swiss franc/British pound= (USD/ British ...

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