Which of the following have been suggested as reasons for the existence of beneficial swaps to firms?

A) tax
B) regulatory change
C) lowest cost of borrowing
D) all of the aboye

Question

Which of the following have been suggested as reasons for the existence of beneficial swaps to firms?

A) tax
B) regulatory change
C) lowest cost of borrowing
D) all of the aboye

Quizplus · Accepted Answer

One perceived motivation behind swaps is to obtain the lowest cost on borrowings.Smith (1992)notes that there may be some opportunity for tax and regulatory arbitrage generating gains in swap contracts,but these are likely to be limited.

Which of the Following Have Been Suggested as Reasons for the Existence