Business-7604037-1 - What are the potential reasons...

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Is the cost of risk-free financing the same or different in different countries? Risk free financing is the return on percentage employed to be risk free investment without any financial loss. Risk free interest is to be expected over a time from the investment. Risk free financing is generally done to buy many things and to run business process. If the borrowing and lending would be risk free there would be fewer lenders but so many borrowers. Risk free financing is taken as an assumption for rational pricing. So it is said risk free investment financing cost is same in all the countries.
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Unformatted text preview: What are the potential reasons cyclical companies invest cyclically rather than counter-cyclically? Cyclical company is a sort of company which follows the repeating pattern of increasing and decreasing earnings. Counter cyclical companies are sort of firms who earn and make profits when market is slow and face loss and investment when market falls. Reasons cyclical companies invest cyclically rather than counter-cyclically because cyclically gives the exact return when desired accordingly from the market rather being affected by other market factors...
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This note was uploaded on 12/05/2011 for the course ACC 134 taught by Professor Erik during the Fall '11 term at Colorado.

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