Assume you have been invited to a meeting with Ciba-Geigy's top financial managers to discuss their debt strategy.
Look at the information about Ciba-Geigy. Based on the nature of its business and the characteristics of its assets, what would you think about the optimal way in which the company should be financed?
Consider the following:
• Should the debt be fixed or floating? How much of the debt is fixed? What would you advise the company?
• How much of the company's debt should be long term?
• Based the distribution of Ciba's sales and assets, what should be the currency composition of its debt? What is it in fact, and what would you advise the company?
A Suggested Solution