Botany Bay Corporation. Botany Bay Corporation of Australia seeks to borrow US$30,000,000 in the eurodollar market. Funding
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Botany Bay Corporation. Botany Bay Corporation of Australia seeks to borrow US$30,000,000 in the eurodollar market. Funding is needed for two years. Investigation leads to three possibilities.
Compare the alternatives and make a recommendation.
1. Botany Bay could borrow the US$30,000,000 for two years at a fixed 5% rate of interest.
2. Botany Bay could borrow the US$30,000,000 at LIBOR which is currently 3.5%, and the rate would be reset every six months.
3. Botany Bay could borrow the US$30,000,000 for one year only at 4.5%. At the end of the first year Botany Bay Corporation would have to negotiate for a new 1-year loan.
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Related Book For
Fundamentals Of Multinational Finance
ISBN: 9781292215211
6th Global Edition
Authors: Michael Moffett
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