Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
How can we determine the borrowing
Expert Solution
Step 1
The borrowing rate of return is the return that is charged on the borrowings made by the firms or individuals. It tells how much interest payments have to be made according to the borrowing rate. Generally, the lender wants this rate to be higher while the borrower wants this rate to be lower because it will have reduced the cost to the borrower.
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