Finance business expansion with short term debt

Assignment Help Financial Management

Reference no: EM131300370

If the yield curve is downward sloping short-term interest rates are higher than long-term rates. Why might a borrower still choose to finance a business expansion with short term debt?

Reference no: EM131300370

Questions Cloud

Annual deposits into the account at the end each year : You want to have $67,000 in your savings account 12 years from now, and you're prepared to make equal; annual deposits into the account at the end each year, if the account pays 6.80 percent interest, what amount you deposit each year?

Degree of operating leverage at the indicated sales volume : What is the profit for the company at the indicated sales volume? What is the break-even point in units? What is the degree of operating leverage at the indicated sales volume?

The firms commercial construction business : The R. Morin Construction Company needs to borrow $90,000 to help finance the cost of a new $126,000 hydraulic crane used in the firm's commercial construction business. The crane will pay for itself in 1 year, and the firm is considering the followi..

Make the initial deposit today rather than ten years : You can deposit $11,000 into an account paying 7% annual interest either today or exactly 10 years from today. ow much better off will you be at the end of 35 years if you decide to make the initial deposit today rather than 10 years from today?

Finance business expansion with short term debt : If the yield curve is downward sloping short-term interest rates are higher than long-term rates. Why might a borrower still choose to finance a business expansion with short term debt?

What is the percentage change in price of these bonds : Both Bond Bill and Bond Ted have 11.6 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 6 years to maturity, whereas Bond Ted has 23 years to maturity. Both bonds have a par value of 1,000. If interest rates sudden..

Three-month european call options with strike price : The current price of a stock is $84, and three-month European call options with a strike price of $85 currently sell for $4.20. An investor who feels that the price of the stock will increase is trying to decide between buying 100 shares and buying 2..

Annual percentage increase in winner check over this period : In 1901, the first Green Jacket Golf Championship was held. The winner's prize money was $210. In 2015, the winner's check was $1, 550,000. What was the annual percentage increase in the winner's check over this period?

The implicit annual rate of return : You are reviewing your portfolio for which you know that 10 years ago you invested $17,850 in Amazon stock (AMZN). You are pleasantly surprised that the current value of the stock is $227,985. However, realizing that it was 10 years ago, you are inte..

User Account

All Pages