Identifying Determinants of the Cost of Long Term Borrowing for U.S. Firms: Insights for Management

Richard Cebula () and Richard McGrath

MPRA Paper from University Library of Munich, Germany

Abstract: Long term corporate planning and the effective pursuit of profits require, among other things, an understanding by management of the factors that influence the cost of borrowing. This study empirically identifies key factors that influence the cost of borrowing for U.S. firms, which cost is measured in the present study by the interest rate yield on Moody's Baa-rated corporate bonds. Identification of these factors is essential knowledge in order for firm management to be able to anticipate to at least some degree both current and future trends in the cost of borrowing to finance capital formation

Keywords: long term cost of borrowing; firms costs; management insights (search for similar items in EconPapers)
JEL-codes: E31 E43 H62 (search for similar items in EconPapers)
Date: 2006-10-29
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Published in Gitam Journal of Management 4.5(2007): pp. 22-28

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