65 642
Assignments Done
99,2%
Successfully Done
In October 2018

Answer to Question #32534 in Macroeconomics for osama

Question #32534
1. A company X has funded its operations by bank loans extensively. The interest rate on the loans is tied to the market interest rates and is adjusted every six months. Thus the cost of funds is sensitive to interest rate movements. Because of expectations that EU economy would strengthen during the next year, the company plans further growth through investments. The company expects that it will need substantial long-term financing to finance its growth and plans to borrow additional funds in the debt market.
a) What can be the company’s expectations about the change in interest rates in the future? Why?
b) How would these expectations affect the company’s cost of borrowing on its existing loans and on future debt?
c) How these expectations would affect the company’s decision when to borrow funds and whether to issue floating-rate or fixed rate debt?
2. Assume that the government makes a major sale of bonds to the private sector.

Expert's answer
Unfortunately, your question requires a lot of work and cannot be done for free.
Submit it with all requirements as an assignment to our control panel and we'll assist you.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

Submit
Privacy policy Terms and Conditions