1. Worthington, Inc. is planning to issue $7,500,000 in 120-day maturity notes carrying a rate of 11 percent per year.Worthington’s commercial paper will be placed at a cost of $35,000. What is the effective cost of credit to Worthington?
Please explain....
2. If the overall stock market is sometimes volatile, how might that situation influence the way corporations choose to compensate their senior executives with less volatile incentives? Discuss the different types of compensation plans they might use.