Markborough Properties Inc.’s vice-president had to be ready for presiding a meeting with members of the board. The motive of this meeting was to control the interest rate exposure of the company through its minimization by hedging.
The methods for this were swaps and caps for interest rates. Was the company’s timing appropriate for this? If yes, then exactly how so and with the use of which methodology?
Learning Objective:
To introduce pupils to the usage of LIBOR contracts and interest rate swaps, interest rate caps. Consider the limitations, of each choice, while students are obligated to compute the cost.
To help pupils develop an understanding of developing a real estate business and the funding risks linked with income and acreage property operations. A proposition for interest rate hedging must be made with consideration for these lending threats.
Publication Date: 01/01/1987
This is just an excerpt. This case is about Finance
Related Case Solutions & Analyses:
Engro Chemicals Pakistan Limited – Business Disaster Overcome
BHP Billiton and Mozal (B)
Politics Institutions and Project Finance: The Dabhol Power Project
Alex Laats and NBX Corporation
Hotmail
Jim Jorgensen: The Initial Days at Discovery Zone
Pudong New Area of Shanghai
Project Sun Devil and Project Paris
Magic Timber and Steel: Investment Evaluation with Net Present Value
A Greek Tragedy With No Written Final Act
