Existing debt coming due as well as a change in market. These are more than likely not 30+ year loans. Probably anything from overnight to 2-10 year. It is also possible to be 'cash poor' but have lots of invested value. That trap puts you in a spot where you borrow money to make payroll, even though you have enough. That gotcha put a lot of companies out of businesses in 2008. When it became very difficult to even borrow money. Higher rates also make it harder to borrow especially if you are carrying an existing debt load.
This is just speculation on my part but also perhaps instead of investing the money in the company it is better to just buy bonds for a better rate of return? Basically instead of buying workers time to get a rate of return. That worker has to 'beat' the interest rate which factors into MR=MC to make it worth the while of the company to keep them around. Wonder if there are any economic studies on that.
> This is just speculation on my part but also perhaps instead of investing the money in the company it is better to just buy bonds for a better rate of return?
That is what I was trying to get an answer on. That is rooted on the premise that it needs to be a truthood/assumption that Microsoft's projects net them less than the risk free rate (which is 4.5%).
This is just speculation on my part but also perhaps instead of investing the money in the company it is better to just buy bonds for a better rate of return? Basically instead of buying workers time to get a rate of return. That worker has to 'beat' the interest rate which factors into MR=MC to make it worth the while of the company to keep them around. Wonder if there are any economic studies on that.