LiveBetter Can Choose Between the Two Following Issues

question 58

Essay

LiveBetter can choose between the two following issues:
a. A public issue of $10 million face value of 10-year debt. The interest rate on the debt would be 8.5% and the debt would be issued at face value. The underwriting spread would be 1.5% and other expenses would be $80,000.
b. A private placement of $10 million face value of 10-year debt. The interest rate on the debt would be 9% and the total issuing expenses would be $30,000.
Which deal should LiveBetter choose?

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Definitions:

International Assignment

A work task or role assigned to an employee which involves working in a different country from their home or regular office location.

Codetermination

A practice where workers have a role in company management decisions, typically through participation on corporate boards.

Expatriate Manager

A manager who is working in a country different from their native country, often for a predetermined period.

Multinational Corporations

Companies that operate in multiple countries, often managing production or delivering services in more than one country.