Why might a company become involved in an interest rate swap contract to receive fixed interest payments
Question:
Why might a company become involved in an interest rate swap contract to receive fixed interest payments and pay variable?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 77% (9 reviews)
This is likely a setting where the company is hedging the fair ...View the full answer
Answered By
PALASH JHANWAR
I am a Chartered Accountant with AIR 45 in CA - IPCC. I am a Merit Holder ( B.Com ). The following is my educational details.
PLEASE ACCESS MY RESUME FROM THE FOLLOWING LINK: https://drive.google.com/file/d/1hYR1uch-ff6MRC_cDB07K6VqY9kQ3SFL/view?usp=sharing
3.80+
3+ Reviews
10+ Question Solved
Related Book For
Intermediate Accounting
ISBN: 978-0470423684
13th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield
Question Posted:
Students also viewed these Accounting questions
-
A financial institution has entered into an interest rate swap with company X. Under the terms of the swap, it receives 10% per annum and pays six-month LIBOR on a principal of $10 million for five...
-
Why would a firm use an interest rate swap as part of its financing strategy?
-
An interest rate swap has two primary risks associated with it. Identify and explain each risk?
-
Sketch the graph of the function and state its domain. f (x) = ln |x|
-
During the year, Xenoc produces 1,500 pairs of speakers and sells 1,200 pairs. Xenoc produces stereo speakers. The selling price per pair of speakers is $1,800. There is no beginning inventory. Costs...
-
A reliable sales forecast has been obtained indicating that the Special Products Company (see Section 1.2) would be able to sell 30,000 iWatches, which appears to be enough to justify introducing...
-
Comment on the statement that the essential purpose of the user interface is to enable the user and the system to exchange messages. Provide two examples.
-
On a cool day in April a scantily clothed runner is known to lose heat at a rate of 500 W because of convection to the surrounding air at T = 10oC. The runner's skin remains dry and at a temperature...
-
Module 4 addresses risk, specifically systematic risk.The current pandemic has dramatically increased overall and systematic risk in equity markets. What can or should be done, if anything, to calm...
-
The first quarter tax return needs to be filed for Prevosti Farms and Sugarhouse by April 15, 2019. For the purpose of the taxes, assume the second February payroll amounts were duplicated for the...
-
In what situation will the unrealized holding gain or loss on an available-for-sale security be reported in income?
-
What is the purpose of a cash flow hedge?
-
Tiggies Dog Toys, Inc., reported a debt-to-equity ratio of 1.75 times at the end of 2015. If the firms total assets at year-end were $25 million, how much of their assets are financed with debt and...
-
How does the use of extended similes, also known as epic similes, enrich epic poetry and other narrative forms by elaborating upon comparisons through detailed elaboration, thereby enhancing...
-
How do postcolonial authors utilize allusions to colonial histories and indigenous traditions as a means of reclaiming and reinterpreting cultural narratives, subverting colonial perspectives, and...
-
Briefly outline the process you established for reporting payroll according to statutory requirements incorporated in the organisational policies and procedures for this task.
-
Examine the CAATTS instruments that are available for scrutinizing application controls of a corporate entity and select the one that you deem to be the most efficient in identifying control...
-
How do you expect VE, RR, and TV to respond to incremental exercise?
-
Consider the spin vector \(\sigma_{S}\). \[\sigma_{S}=\frac{\hbar}{2}\left(\sigma_{x} \hat{\mathbf{i}}+\sigma_{y} \hat{\mathbf{j}}+\sigma_{z} \hat{\mathbf{k}}ight)\] Calculate the matrix...
-
One Way Cellular accountants have assembled the following data for the year ended September 30, 2014: Prepare the operating activities section using the indirect method for One Way Cellulars...
-
Liquids and solids have densities about 1000 times greater than gases. Explain how this implies that the distances between atoms and molecules in gases are about 10 times greater than the size of...
-
Jason Corporation completed, its board of directors authorized, and it issued its financial statements following IFRS for the year ended December 31, 2020, on March 10, 2021. The following events...
-
The financial statements of Mackay Corporation show the following information: Instructions a. Using horizontal analysis, analyze Mackay Corporation's change in liquidity, solvency, and profitability...
-
The condensed statement of changes in financial position and detailed income statement information (in $000) for Tran Consulting Ltd. follow. Tran contracts professionals in the electronic data...
-
Explain a typical structural engineering project shown in figure. Planning Preliminary structural design Load estimation Structural analysis Safety/serviceability Yes Construction No Revised...
-
What are the 4 specialties of structural engineering? Any resources for core principles of structural engineering?
-
what are the role of structural analysis in structural engineering? What is the difference between structural engineering and structural analysis?
Study smarter with the SolutionInn App