Fundamentals of Financial Management (MindTap Course List)
Fundamentals of Financial Management (MindTap Course List)
15th Edition
ISBN: 9781337395250
Author: Eugene F. Brigham, Joel F. Houston
Publisher: Cengage Learning
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Chapter 20, Problem 4Q
Summary Introduction

To Determine: The reason on why a company must prefer to issue floating-rate as contrasting to fixed-rate preferred stock.

Introduction: A floating interest rate alludes to a changeable interest rate that progressions over the length of the debt obligation. It is the contrary option in contrast to a fixed interest rate credit, where the interest rate stays consistent for the duration of the life of the debt.

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