The Currency-of-Denomination Decision for Debt Financing

S. Ghon Rhee, Rosita P. Chang, Peter E. Koveos

Research output: Contribution to journalArticlepeer-review

7 Scopus citations


This paper examines the currency-of-denomination decision for long-term debt financing in the presence of corporate income taxes and flotation costs. The numerical analysis provides convincing evidence that the “tax effect” dominates the “flotation cost effect” unless the firm operates in tax haven countries. Hence, the conventional decision rule still applies to the choice of currency in which to borrow or to lend: Borrow in the weakest currency and lend in the strongest.

Original languageEnglish (US)
Pages (from-to)143-150
Number of pages8
JournalJournal of International Business Studies
Issue number3
StatePublished - Sep 1 1985

ASJC Scopus subject areas

  • Business and International Management
  • General Business, Management and Accounting
  • Economics and Econometrics
  • Strategy and Management
  • Management of Technology and Innovation


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