Spencer Hall (B) - The Case Centre

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Compact case

Case

Reference no. 9A97N004

Subject category: Finance, Accounting and Control

Authors: Stephen R Foerster (Ivey Business School, Western University); Janice Edgecomb (Ivey Business School, Western University)

Published by: Ivey Publishing

Originally published in: 1996

Version: 2000-12-12

Length: 5 pages

Topics: Hedging; Interest rates; Loan evaluation; Financial strategy

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Abstract

This case is an extension of Spencer Hall (A), case 9A95B045. The board decided to purchase an interest rate cap to hedge interest exposure on the $7.7 million loan. Subsequently, interest rates have risen and ScotiaBank has offered to cancel the cap agreement and pay a premium of $143,000.

Location:

Canada

Industry:

Holdings and other investment companies

Size:

Small