In Emerging Market Countries, Many Firms Have Debt Denominated in Foreign

Multiple Choice

In emerging market countries, many firms have debt denominated in foreign currency like the dollar or yen. A depreciation of the domestic currency ________.

A) results in an increase in the value of the firm's assets
B) results in increases in the firm's indebtedness in domestic currency terms, even though the value of their assets remains unchanged
C) means that the firm does not owe as much on their foreign debt
D) strengthens their balance sheet in terms of the domestic currency