How Do Firms Develop a Short-Term Financing Plan That Meets

question 17

Essay

How do firms develop a short-term financing plan that meets their need for cash?

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Definitions:

Coupon Payments

Periodic interest payments made to bondholders during the life of the bond.

Floating Rate Bonds

Bonds that have variable interest rates, adjusting periodically in relation to an index or benchmark rate.

Interest Rates

The cost of borrowing money or the return for lending money, typically expressed as an annual percentage rate.

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, including both interest payments and capital gains.