Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
An FI has issued a one-year loan commitment of $10 million for an up-front fee of 50 basis points. The back-end fee on the unused portion of the commitment is 20 basis points. The bank's base rate on loans is 7 percent, and loans to this customer carry a risk premium of 2 percent. The bank requires a compensating balance on loans of 10 percent to be placed in demand deposits and must maintain reserve requirements on demand deposits of 10 percent. The customer is expected to draw down 60 percent of the commitment at the beginning of the year. The FI has a cost of capital of 5%
(a) Discuss what is the expected return on this loan without taking future values into consideration?
(b) What is the expected return on this loan using future values? That is, the fees and interest income are evaluated at the end of the year when the loan is due.
(c) What is the expected annual return on the loan if the draw-down on the commitment does not occur until at the end of nine months?
Identify the alternatives for investing cash on a short-term basis, and discuss the general characteristics of each.
Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $250,000 of 16 percent debt and 2,000 shares of common stock.
over the years the research findings regarding changing from fifo to lifo have varied. why do you suppose this is the
Are governmental fund financial statements sufficient for users seeking information about operational accountability? If so, why? If not, what type of information is needed to properly assess the effectiveness of the agency's operations that governme..
star corporation issued 5 million of preferred stock. the flotation cost was 10 percent of gross proceeds. the dividend
signet pipeline co. is looking to install new equipment that will cost 2750000. the cash flows expected from the
What is the approximate number of bonds this company would be required to issue (after paying floatation cost) for raising $1.5 million? Assume tax rate to be 34%.
amigo software inc. has total assets of 891000 current liabilities of 240000 and long-term liabilities of 188000. there
Explain the implication the Law of One Price has for the price of a financial security. Provide examples.
historically high return stocks have exhibited lower risk than low return stocks?.just the opposite what the sml
The game show has placed a subliminal message on the curtain containing the gag prize, which makes the probability of choosing the gag prize equal to 75 percent.
Hatfield Medical Supplies's stock price had been lagging its industry averages
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd