Company X Wants to Borrow $10,000,000 Floating for 5 Years;

question 94

Multiple Choice

Company X wants to borrow $10,000,000 floating for 5 years; company Y wants to borrow $10,000,000 fixed for 5 years.Their external borrowing opportunities are shown below: A swap bank proposes the following interest only swap: X will pay the swap bank annual payments on $10,000,000 with the coupon rate of LIBOR - 0.15%; in exchange the swap bank will pay to company X interest payments on $10,000,000 at a fixed rate of 9.90%. What is the value of this swap to company X?

• A)Company X will lose money on the deal.
• B)Company X will save 25 basis points per year on $10,000,000 = $25,000 per year.
• C)Company X will only break even on the deal.
• D)Company X will save 5 basis points per year on $10,000,000 = $5,000 per year.

Identify and describe the steps in Lewin's approach to managing and guiding the change process.

Recognize examples and sources of organizational resistance to change.

Understand the importance of employee involvement and communication in overcoming resistance to change.

Appreciate the utility of force field analysis in planning and implementing change.

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Definitions:

Correct Order

The proper or desired sequencing of elements, items, or processes according to rules or guidelines.

Recording

The process of entering financial transactions into the accounting records of a business.

Voucher Register

A record of vouchers, which are documents evidencing expenditure or the transfer of funds.

Book Of Vouchers

A ledger or book that contains vouchers, which are documents or files acting as evidence for transactions.