ACG3301project

ACG3301project - 2. During 2005, P&G had returned $11...

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2. During 2005, P&G had returned $11 billion in cash to shareholders through dividends, and has increased shareholders value another $60 billion by nearly doubling the price of P&G stock. Unfortunately, as a multinational company there are business risks that may threaten these expectations of the shareholder, such as changes in the interest rate, currency exchange rates, and commodity pricing. P&G policy is to manage interest cost using a mixture of fixed-rate and variable- rate debt. To manage this risk, P&G enter into interest rate swaps, in which they agree to exchange with the counterparty, at specified rates, the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount. During the year ended June 30, 2005, the company does not believe a near term change in interest rates because there confidence level based on historical interest rate movements reached 95%. Being a multinational company, they manufacture and sell their products in a
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This note was uploaded on 03/05/2011 for the course ACG 3301 taught by Professor Wheatley during the Spring '08 term at FIU.

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ACG3301project - 2. During 2005, P&G had returned $11...

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