Based on reinvesting the prepaid mortgage amount

Assignment Help Financial Management

Reference no: EM131447742

In 2010 a mortgage loan of $8,500,000 was issued by Associated Bank on a downtown office building. The terms of the loan were 10 years, 6.15% interest rate, interest only (no amortization). The borrower has a buyer for the property and would like to sell it on 2016, however, the loan has a yield maintenance prepayment clause in the mortgage documents where the prepayment penalty is based on reinvesting the prepaid mortgage amount in U.S. Treasury securities of a similar term as the remaining term of the loan. What is the prepayment penalty? Use the average between the 3 year and 5 year US Treasury Yields to get the 4 year US Treasury.

Reference no: EM131447742

Questions Cloud

Develop goals and objectives for the practicum experience : As a future advanced practice nurse, it is important that you are able to connect your classroom experience to your practicum experience. By applying the concepts you study in the classroom to clinical settings, you enhance your professional comp..

How has technology aided inventory management : Discuss the following: What are some of the ways in which a company can reduce the need for inventories? How has technology aided inventory management

What you have learned about bruce springsteen : Nobel Laureate Bob Dylan, Ray Charles and Paul Robeson, Woody Guthrie and Pete Seeger, Hank Williams and, of course, the king - Elvis Presley. Do you agree or disagree?

Description of the reasons it is provocative : Give a concise description of the reasons it is provocative, its implications for the global economy and international business and attempt to answer my question

Based on reinvesting the prepaid mortgage amount : In 2010 a mortgage loan of $8,500,000 was issued by Associated Bank on a downtown office building. The terms of the loan were 10 years, 6.15% interest rate, interest only (no amortization). The borrower has a buyer for the property and would like to ..

Simple regression vs multiple regression : Why model 2 in theory is better than model 1 even if the main concern is estimation of the impact of factor X1?

Different strategy to achieve the government : Meanwhile, the other employee proposes using a different strategy to achieve the government's goal of reducing pollution in the area from 12 units to 6 units. This employee suggests that the government issue two pollution permits to each firm.

What is redemption distribution not equivalent to a dividend : A redemption is treated as payment in exchange for the shareholder's stock when it is not essentially equivalent to a dividend. When is a redemption distribution not equivalent to a dividend?

Evaluate the company business strategy : In preparation for your report, conduct your review of the organization using the following approach: Evaluate the company's business strategy and global competitiveness plan. Conduct an internal assessment using SWOT analysis

User Account

All Pages