Good Company Prefers Variable to Fixed Rate Debt

question 50

Multiple Choice

Good Company prefers variable to fixed rate debt. Bad Company prefers fixed to variable rate debt. Assume the following information for Good and Bad Companies: Given this information:

• A) an interest rate swap will probably not be advantageous to Good Company because it can issue both fixed and variable debt at more attractive rates than Bad Company.
• B) an interest rate swap attractive to both parties could result if Good Company agreed to provide Bad Company with variable rate payments at LIBOR + 1% in exchange for fixed rate payments of 10.5%.
• C) an interest rate swap attractive to both parties could result if Bad Company agreed to provide Good Company with variable rate payments at LIBOR + 1% in exchange for fixed rate payments of 10.5%.
• D) none of the above

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Definitions:

Résumé Types

Different formats or styles of résumés, such as chronological, functional, or combination, tailored to showcase an individual's background and skills effectively.

Job Changes

Refers to alterations in employment situations, such as changing roles, companies, or industries.

Group Similar Work

The practice of organizing tasks, projects, or jobs that have common characteristics or objectives into the same category or team.

Frequent

Occurring or done on many occasions, in many cases, or in quick succession.