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book International Financial Management 2nd Edition by Geert Bekaert ,Robert Hodrick cover

International Financial Management 2nd Edition by Geert Bekaert ,Robert Hodrick

النسخة 2الرقم المعياري الدولي: 978-0132162760
book International Financial Management 2nd Edition by Geert Bekaert ,Robert Hodrick cover

International Financial Management 2nd Edition by Geert Bekaert ,Robert Hodrick

النسخة 2الرقم المعياري الدولي: 978-0132162760
تمرين 18
FE Company wishes to raise $1,000,000 with debt financing. The treasurer of FE Company considers two possible instruments:
i. A 2-year floating-rate note at 1% above the 1-year dollar LIBOR rate on which interest is paid once a year
ii. A 2-year bond with an interest rate of 5% Currently, the dollar LIBOR is 1.50%.
a. Is it obvious which security the Treasurer should pick
b. Suppose the Treasurer believes that the 1-year LIBOR rate 1 year from now will rise to 4.50%. Which security has the lowest expected AIC if borrowing fees are similar for the two instruments
التوضيح
موثّق
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a.
No, we cannot say that it is obvious...

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International Financial Management 2nd Edition by Geert Bekaert ,Robert Hodrick
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