Should corporations issue bonds in countries where they face the lowest credit spreads? Be very specific about the concept of credit spread you use
What will be an ideal response?
The answer here is potentially yes. When expressed in a multiplicative sense (by dividing one plus the interest rate the company faces by one plus the rate on a comparable risk-free government bond), lower credit spreads do indeed translate into lower borrowing costs, provided the company can cheaply hedge the cash flows involved into its desired borrowing currency .
You might also like to view...
Commissions are given to employees as a reward on special occasions.
Answer the following statement true (T) or false (F)
______ is the process of choosing the best-qualified applicant who was recruited for a given job.
A. Simulation B. Selection C. Negligent hire D. Validity
What strategies involve suspending disbelief and dropping constraints in order to create unrealistic states, or fantasies?
a. analytical strategies b. search strategies c. imagination-based strategies d. development strategies
A contract in which a party assumes a secondary obligation must be in writing to be enforceable.
Answer the following statement true (T) or false (F)