Company E presently has access to floating interest rate funds at a margin of .03 over LIBOR. its direct borrowing cost is .12 in the fixed-rate bond market. In Contrast, Company F has access to fixed-rate funds at .11 and floating-rate funds at LIBOR is .01. Is the fixed rate or the floating rate the better deal for Company E? Explain.

Answer rating: 100% (QA)

To determine whether the fixed rate or the floating rate is the better deal for Company E we need to ... View the full answer