Your company, large and currently with a good credit rating, needs $10 million for the next 5 years to finance a new long-term capital project. As a CFO, you are considering two financing alternatives: (a) issuing commercial paper (CP) with a maturity of 9 months (maximum) and rolling it over for the next 5 years; and (b) 5-year term loan at a fixed interest rate through an insurance company.
Discuss the pros and cons of issuing CP relative to borrowing the term loan to finance the new project. Assume that the corporate bond yield curve is currently a normal, upward slopping yield curve.
Please post your initial response by 23:59 EST Day 3 of the Week, and comments on the posts of at least two classmates by 23:59 EST Due Date.
You must first post your own response directly to the Discussion Topics by Day 3 before accessing other students’ responses. In addition, you should post at least TWO thoughtful and substantive responses to other classmates’ answers/comments by the due date in order to earn 5 points for each Discussion Topic. A mere “Yes, I agree” or “No, I don’t agree” type of responses will not be given any credit.
Additional bonus credit may be given to substantive responses reflecting additional research with sources of information clearly identified as they are particularly valued and enrich our online learning.
Concluding comments on each Discussion Topic will be posted on the Discussion folder after due date.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more