Question: Figure 5.4 shows that Johnson and Johnson's five-year borrowing rate is 1.9% and Xerox's is 4.0%. Which would you prefer? $500 from Johnson and Johnson

Figure 5.4 shows that Johnson and Johnson's five-year borrowing rate is 1.9% and Xerox's is 4.0%. Which would you prefer? $500 from Johnson and Johnson paid today or a promise that the firm will pay you $575 in five years? Which would you choose if Xerox offered you the same alternative?

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