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
What is meant by the incremental cost of refinancing?
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Step 1
Refinancing refers to making change in the capital structure of the company by replacing the proportion of debt in capital structure by maturing the current debt and taking fresh debt from market with new terms which are more beneficial for the company. It is done to take advantage of market fluctuations.
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