Case study of ibm

Assignment Help Finance Basics
Reference no: EM1346100

Assume that IBM would like to borrow fixed-rate yen, whereas Korea Development Bank (KDB) would like to borrow floating-rate dollars. IBM can borrow fixed-rate yen at 4.5 percent or floating-rate dollars at LIBOR + 0.25 percent. KDB can borrow fixed-rate yen at 4.9 percent or floating-rate dollars at LIBOR + 0.8 percent.

a. What is the range of possible cost savings that IBM can realize through an interest rate/currency swap with KDB?

b. Assuming a national principal equivalent to $125 million and a current exchange rate of ¥105/$, what do these possible cost savings translate into in yen terms?

c. Redo parts a and b assuming that the parties use Bank of America, which charges a fee of 8 basis points to arrange the swap.

Reference no: EM1346100

Questions Cloud

Internal communication issues in a hospital : Complications to communication abound which causes delays in service delivery and when people can take time off from work and what are the possible problems and solutions when you meet this kind of things?
Questions related to business communication : Show the relationship that can exist between group a members diversity and communication style and how can diversity affect the group members communication style
What is the deflection of each object : What stage of the scientific method would someone be at if they make a prediction that drinking alcohol will make people more violent throughout a sporting event.
Describe methods of future financial needs : Financial prediction is important because it adds discipline to way an industrialist thinks about venture. Forecasting helps estimates cash needs and timing of these needs.
Case study of ibm : Assume that IBM would like to borrow fixed-rate yen, whereas Korea Development Bank (KDB) would like to borrow floating-rate dollars.
Benefits of measures used to protect operating systems : Describe relative benefits and disadvantages of at least three different measures used to protect operating systems.
Most important concepts in management : What are the three most important concepts in management - Imagine that you are a manager with a staff of supervisors who are preparing to take a management course.
Performing swot analysis on viability of upgrading server : Carry out a SWOT analysis on the viability of upgrading to Server 2008.
Elucidate what is the minimum one-time payment farmer : Illustrate what is the Pig Farm worth. Elucidate what is the minimum one-time payment Farmer A would accept to agree to restrict his land for residential use forever.

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculation of the implied growth duration of various compan

Calculation of the implied growth duration of various companies and decision making  - Compute the growth duration of each company stock relative to the S&P Industrials and evaluate the growth duration of Company A relative to Company B.

  Question on international fisher effect

The annual interest rate on one-year, U.S. government bonds is 5 percent. The annual interest rate on one-year Swedish government bonds is 7 percent.

  Determining annuity assessment

What is the relationship between the present value of a single dollar payment formula and present value of ordinary annuity formula for same number of years and same discount rate?

  Computation of firm''s weighted average cost

Computation of firm's weighted average cost of capital considering marginal tax rate and what is the firm's weighted average cost of capital.

  Marriage penalty-life annuity taxation

Howard and Beatrice plan to marry either immediately before or immediately after year-end. Based on tax considerations, what marriage date would you suggest for loving couple? How much would your choice save in taxes?

  Determine the term bond valuation

Determine the term Bond valuation and what would this imply about the terms of the issue

  Various types of merger arbritrage

Describe the mechanics of various types of merger arbitrage, I.e., Cash Deals, Stock Mergers, and complex merger transactions (cash, and various types of stock exchanges).

  Calculate percent change in price

Market, Inc. has a 7 year, 6% annual coupon bond outstanding with a $1,000 par value. The bond has a yield to maturity of 5.5%.

  Interest on bonds article critique

Describe how the article applies or relates to the financial management of company and answer the following questions in 600 words. Use one outside source as reference.

  Network structure and technology complexity

Write down the advantages and disadvantages associated with network structures? Justify your answers. How does technology complexity affect organizational structure? Justify your answer with examples.

  Ramifications of business merger activity

Merger activity continues to be a much-used strategic option. From 2008 to 2009, M&A activity completed totaled approximately $5 trillion.

  Predicting exchange rates

Dorchester Inc. has asked you to aid forecast exchange rates for the 3 potential countries you've selected for your proposal. First plot exchange rates from the past year and try to identify patterns that can be projected into the future.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd