If you were the CFO of a company and the Federal Reserve Bank decided to increase...
If you were the CFO of a company and the Federal Reserve Bank decided to increase the interest rate by 1% beginning next quarter, what steps would you take to raise capital from the financial markets?
Homework Answers
If the federal Reserve bank decides to increase the interest rate by 1% beginning next quarter, the steps that I would take to raise capital from the financial markets would include
1) Selling the bonds to investors to increase the overall capital- By increasing the coupon rate more than the face value and interest rate, it would encourage investors to buy bonds since they are interested in more yields and higher return on investments.
2) Equity Financing- I would prefer selling company stock to raise money
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