Consider the costs and benefits or each source of financing; note: You do not need to limit your alternatives to debt, but if you choose debt, make sure to consider the maturity choice of the firm as well. Consider why is there a yield difference between the two issuances in these two different markets.

Is this due to differences in risk, investor clienteles, liquidity, seniority or something else? 

If the price differential were due to differences in investor clienteles, would this provide an opportunity that hedge fund managers could exploit?

If so, how exactly would they exploit this opportunity? If not, explain the market impediment or friction that prevents hedge fund managers from acting on these price differences.

Answer rating: 100% (QA)

Debt financing The costs associated with debt financing include the interest payments that must be m... View the full answer