Determine the price of swap from the corporation viewpoint

Assignment Help Financial Management
Reference no: EM131115497

A corporation enters into a five-year interest rate swap with a swap bank in which it agrees to pay the swap bank a fixed rate of 9.75 percent annually on a notional amount of €15,000,000 and receive LIBOR. As of the second reset date, determine the price of the swap from the corporation's viewpoint assuming that the fixed-rate side of the swap has increased to 10.25 percent.

Reference no: EM131115497

Questions Cloud

Forecast the firm additional funds needed : Harvest Home is planning its operations and needs you to forecast the firm's additional funds needed (AFN). The firm is operating at full capacity. Data for use in the forecast are shown below.
Define basic components of strategic information system plan : Determine two (2) significant methods that health care systems should use in order to prevent misuse of information and protect data privacy and thus achieve a high level of security of health information. Provide a rationale to support your respo..
Wages plus lost scooter revenue : EZSkut rents out power scooters at a large shopping complex. They currently employ one repair person who performs emergency repairs for their fleet of 100+ scooters (assume that the repair person works and is paid for a full work shift even if there ..
Sport pro magazine sold annual subscriptions on august : Prepare Sport Pro's August 1, 2010, journal entry and the December 31, 2010, annual adjusting entry.
Determine the price of swap from the corporation viewpoint : A corporation enters into a five-year interest rate swap with a swap bank in which it agrees to pay the swap bank a fixed rate of 9.75 percent annually on a notional amount of €15,000,000 and receive LIBOR. As of the second reset date, determine the ..
Identify profitability ratios that creditors may interested : Identify three profitability ratios that creditors may be interested in. Calculate the ratio for each company, and prepare a report to summarize your findings on the financial health of each company.
What is the yield to maturity of bond : A Japanese company has a bond outstanding that sells for 89 percent of its ¥100,000 par value. The bond has a coupon rate of 4.8 percent paid annually and matures in 19 years.
Calculate cost of good sold and ending inventory : Calculate Cost of Good Sold and Ending Inventory under each of the following cost flow assumptions: Weighted Average, FIFO and LIFO
If burr refinances the obligation by issuing a long term : If Burr refinances the obligation by issuing a long-term note on February 14 and using the proceeds to pay off the note due February 15, how much of the $500,000 should be reported as a current liability at December 31, 2010?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the expected return on this stock

The stock of Chocolate Galore is expected to produce the following returns, given the various states of the economy. What is the expected return on this stock?

  Discuss how the organization can capitalize on the

bull write a brief company history including a mission statement if available.section iibull thoroughly explain at

  What is the market rate of return

Northern Gas recently paid a $1.80 annual dividend on its common stock. This dividend increases at an average rate of 6.9 percent per year. The stock is currently selling for $25.91 a share. What is the market rate of return?

  What is the difference in cash flow between the two firms

The Jupiter Corporation has a gross profit of $743,000 and $276,000 in depreciation expense. The Saturn Corporation also has $743,000 in gross profit, with $47,700 in depreciation expense. Selling and administrative expense is $164,000 for each compa..

  What was return on equity

A fire destroyed a large percentage of the financial records of the Carter Health System. You have the task of piecing together information to prepare a financial report. You have found the profit margin to be 5.4 percent. If sales were $4 million on..

  Ability to be persuasive in a workplace document

Which of the following is NOT a category of constraints on your ability to be persuasive in a workplace document?

  Market showed long-term debt

The December 31, 2013, balance sheet of Suzette's Market showed long-term debt of $638,100 and the December 31, 2014, balance sheet showed long-term debt of $574,600. The 2010 income statement showed an interest expense of $42,300. What was the firm'..

  What are the benefits of ratio analysis

What are the benefits of ratio analysis? What are the limitations of ratio analysis? What can be done to minimize the limitations on ratio analysis? Explain.

  Generates after-tax cash flows

An investment of $83 generates after-tax cash flows of $38.00 in Year 1, $70.00 in Year 2, and $133.00 in Year 3. The required rate of return is 20 percent. The net present value is

  Tax consequence of owning a mutual fund

What would be the tax consequence of owning a mutual fund that made distributions of $600 resulting from short-term gains and $800 resulting from long-term gains assuming a 30% tax bracket and a 10% capital gains rate?

  What is the net present value of the refinance decision

She currently owes $131,600 on an original $136,193 15-year FRM loan that she originated 2years ago at 4.375%. Unlike earlier assignments, you are responsible to use your ownknowledge of Excel to build spreadsheets to answer each of the questions lis..

  Terms of loan agreement specified four equal annual payment

On January 2, 2014, Jensen Company borrowed $102,000 from Lyon Country Bank. The terms of the loan agreement specified 4 equal annual payments at 6% annual interest. Compute the amount of each of these payments, assuming, they begin on December 31, 2..

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