The interest rate a company pays on loans outstanding


The interest rate a company pays on loans outstanding depends on

a. Its credit rating

b. How much it has borrowed against its credit line and free cash flow( defined as net income plus depreciation less dividend payments)

c. Its balance sheet strength, global market share, net profits and stock price.

d. How many consecutives years the company has been profitable, its current ration and its ROE

e. Its net profit margins, ROE, and amount of cash on hand to make interest payments

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Operation Management: The interest rate a company pays on loans outstanding
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