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Botany Bay Corporation of Australia seeks to borrow US$30,000,000 in the Eurodollar market

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Botany Bay Corporation of Australia seeks to borrow US$30,000,000 in the Eurodollar market. Funding is needed for two years.  Investigation leads to the three possibilities below. Make a recommendation for Botany Bay comparing the three alternatives along three dimensions: interest costs over the next two years, certainty over access to capital, and certainty over cost of capital.

1. 1. Botany Bay could borrow the US$30,000,000 for two years at a fixed 5% rate of interest
   2. Botany Bay could borrow the US$30,000,000 at LIBOR + 1.5%. LIBOR is currently 3.5%, and the rate would be reset every six months
   3. Botany Bay could borrow the US$30,000,000 for one year only at 4.5%. At the end of the first year Botany Bay would have to negotiate for a new one-year loan.