G Jordan Enterprises plans to issue $120,000,000 of 20-year semi-annual bonds in September to help finance a new factory. It is January, and the current cost of debt to the company is 9 percent. However, the firm’s financial manager is concerned that interest rates will climb by 1.5 percent in a current high inflation environment. a) What would be the outcome if interest rates climb by 1.5 percent and Jordan did not hedge its position? b) If Jordan hedges the bond issue, it will use the Treasury bond ($100,000) futures contracts that are currently trading at 129-2. What would be the outcome if Jordan hedges its position and interest rates climb by 1.5 percent on the Treasury bond as well?
Answers: 1
Business, 22.06.2019 04:10, chloeholt123
What is the difference between secure bonds and naked bonds?
Answers: 1
Business, 22.06.2019 19:40, apodoltsev2021
Aprimary advantage of organizing economic activity within firms is thea. ability to coordinate highly complex tasks to allow for specialized division of labor. b. low administrative costs because of reduced bureaucracy. c. eradication of the principal-agent problem. d. high-powered incentive to work as salaried employees for an existing firm.
Answers: 1
G Jordan Enterprises plans to issue $120,000,000 of 20-year semi-annual bonds in September to help f...
Mathematics, 26.06.2020 16:01
Mathematics, 26.06.2020 16:01
Mathematics, 26.06.2020 16:01
Biology, 26.06.2020 16:01
Mathematics, 26.06.2020 16:01
Mathematics, 26.06.2020 16:01