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 .

Business

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Answer the following statement true (T) or false (F)

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