Board of directors of Union Carbide asked to evaluate proposals from staff treasurer, who articulated a policy to manage the debt portfolio. The staff assumes that the value of shares will be maximized if the company manages its interest rate exposure for the corresponding period of its obligations as its assets. Based on statistical analysis, expertise rivals policies and reasoning, they argue that firms set the duration of the test for its obligations, against which all future active management activities be measured. "Hide
by Peter Tufano, Jonathan S. Hadley Source: Harvard Business School 24 pages. Publication Date: February 15, 1994. Prod. #: 294057-PDF-ENG
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