"lluvia manufacturing and paraguas products both seek funding at the lowest possible cost. lluvia would prefer the flexibility of floating rate borrowing, while paraguas wants the security of fixed rate borrowing. lluvia is the more credit-worthy company. with the better credit rating, lluvia has lower borrowing costs in both types of borrowing. assumptions   lluvia   paraguas credit rating   aaa   bbb prefers to borrow   floating   fixed fixed-rate cost of borrowing   6.000%   12.000% floating-rate cost of borrowing:         libor (current=4%)   4.000%   4.000% spread   1.000%   4.000% total floating-rate   5.000%  
8.000%"however, it could borrow at libor + 2.000% and swap for fixed rate debt. what should they do? (libor is 5.500%)

Why does an organization prepare a balance sheet? a. to reveal what the organization owns and owes at a point in time b. to reveal how well the company utilizes its cash c. to calculate retained earnings for a given accounting period d. to calculate gross profit for a given accounting period

Aggart technologies is considering issuing new common stock and using the proceeds to reduce its outstanding debt. the stock issue would have no effect on total assets, the interest rate taggart pays, ebit, or the tax rate. which of the following is likely to occur if the company goes ahead with the stock issue? a. the roa will decline. b. taxable income will decline. c. the tax bill will increase. d. net income will decrease. e. the times-interest-earned ratio will decrease

Suppose that the u. s. dollars-mexican pesos exchange rate is fixed by the u. s. and mexican governments. assume also that labor is mobile between the united states and mexico due to low transportation costs. which of the following situations is likely to happen as a result of a simultaneous increase in the demand for u. s. goods and decrease in the demand for mexican goods? (pick mexican unemployment rate increases, and the country undergoes bad economic times for a sustained u. s. unemployment rate increases, and the country undergoes bad economic times for a sustained mexican unemployment rate rises at first, but it soon drops as unemployed mexicans move to the united states for mexican unemployment rate rises at first, but then it drops as mexican pesos depreciate against u. s. dollars.