Effective Rate Minimization in Cooperative Financing

Ken D. Duft

No 283652, 1978 Annual Meeting, August 6-9, Blacksburg, Virginia from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The recent incorporation of large new cooperative borrowers into the U.S. Banks for Cooperatives system has impacted the desired equilibrium of debt to equity capital. Capital program adjustments designed to re-establish equity levels have been implemented without the lenders' determination of their impact on effective interest rates. This paper illustrates that such rates are minimized where the capital revolve period coincides with the length of time required to fully capitalize the new borrowers.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 21
Date: 1978-08
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea78:283652

DOI: 10.22004/ag.econ.283652

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