Why is it important to know the percentage of lease debt to traditional debt? Why are...

Question

Question

Why is it important to know the percentage of lease debt to traditional debt?

Why are short-term interest rates important?

Answer 1

Answer #1

An Increase in the lease debt shall be associated with lower traditional debt because approving more leases becomes quite expensive when it's added onto the existing traditional debt. This is important to be aware so that the same can be managed by the firm as not to expose itself to the risk involving credit default or insolvency.
Government securities introduce more of short term interest rates, rate of return could be high possibly due to more fluctuations in short term interest rates.Short term interest rates influence more than the short term bonds which is why short term interest rates and beneficial and important.

Answer 2

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