Question: Case 2. Link Back to Chapter 4 (Debt Ratio). The following questions are not related. 1. IMAX Corporation likes to borrow for longer periods when

Case 2. Link Back to Chapter 4 (Debt Ratio). The following questions are not related. 1. IMAX Corporation likes to borrow for longer periods when interest rates are low and for shorter periods when interest rates are high. Why is this a good business strategy? 2. IMAX needs to borrow $2 million to open new theaters. IMAX can borrow $2 million by issuing 8%. 20-year bonds at a price of 96. How much will IMAX actually be borrowing under this arrangement? How much must IMAX pay back at maturity? How will IMAX account for the difference between the amount borrowed and the amount paid back?

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