From the course: Finance Strategies for Business Leaders
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Interest rates and risk
From the course: Finance Strategies for Business Leaders
Interest rates and risk
- A critical factor that impacts business decisions is the cost of money, and that's best represented by interest rates. Even if you're not a finance leader, leaders throughout an organization should be aware about what's going on with interest rates, because that affects a company's ability to finance, purchasing new equipment, building new structures, or engaging in R and D or M and A activity. All kinds of things a company might finance will be very much dependent on how much that costs. Generally speaking, low interest rates are good for a company and high interest rates are almost always bad. Understanding how much debt your company has and how much interest you need to pay on that debt to keep your business going, are critical business conditions that you should know, even if you aren't in a finance function. After all, if your company already has a lot of debt and big interest expenses, it might not be able to take…
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