Notional principal interest rate swap

Assignment Help Financial Management
Reference no: EM13762788

A company enters into a $35 million notional principal interest rate swap. (pay fixed, receive floating at LIBOR)

The pay is made every 90days for one year. (adjustment factor : 90/360)

The term structure of LIBOR = 90days : 7%, 180days : 7.25%, 270days : 7.45%, 360days : 7.55%

Assume that it is now 30 days into the life of the swap.

The new term structure of LIBOR becomes= 90days: 6.8%, 180days : 7.05%, 270days : 7.15%, 360days : 7.2%

What is the value of the swap?

Reference no: EM13762788

Questions Cloud

Identify all pure strategy nash equilibrium : Assume that the demand for chalk is P = 8 -0.1, where P is the market price and Q is the total market output measured in thousands of boxes of chalk. Construct a payoff table for this game, using profits per firm as the payoffs. Identify all pure str..
Describe some of the reasons for the emergence of dystopian : Describe some of the reasons for the emergence of the dystopian point of view in literature. How do you see these reasons reflected in the reading assigned this week?
How would you evaluate statement : Monopolies always earn economic profits because of their privileged market positions. "How would you evaluate this statement"?
Describe the operational feasibility a technical feasibility : Describe the operational feasibility, technical feasibility, and legal and political feasibility of the proposed computerization task
Notional principal interest rate swap : A company enters into a $35 million notional principal interest rate swap. (pay fixed, receive floating at LIBOR) What is the value of the swap?
The community/public health nurse problems : Describe the population served by the nurse in this role.
Describe some of the reasons for the emergence of dystopian : Describe some of the reasons for the emergence of the dystopian point of view in literature. How do you see these reasons reflected in the reading assigned this week?
What is swimkidss margin of safety : Swimkids is a swimsuit manufacturer. They sell swim suits at a selling price is $30 per unit. Swimkids variable costs are $18 per unit. Fixed costs are $71,100. Swimkids expects sales of $288,700 next year. What is Swimkids's margin of safety?
Fixed selling and administrative costs : U.S. Telephone Cellular sells phones for $100. The unit variable cost per phone is $50 plus a selling commission of 10% (based on the unit sales price per phone). Fixed manufacturing costs total $1,040 per month, while fixed selling and administrativ..

Reviews

Write a Review

Financial Management Questions & Answers

  Value is always based on the future cash flows

Roxanne invested $520,000 in a new business 3 years ago. The business was expected to bring in $8,000 each month for the next 25 years (in excess of all costs). The annual cost of capital (or interest rate) for this type of business was 4% with month..

  What was most recent dividend per share paid on the stock

Codner Corporation stock currently sells for $82 per share. The market requires a 10.2 percent return on the firm’s stock. If the company maintains a constant 3.1 percent growth rate in dividends, what was the most recent dividend per share paid on t..

  Among the cash management techniques used by most

among the cash management techniques used by most businesses are those that slow down their bill payments. a good

  Part a1 give the role amp significance of or in business

part a1. give the role amp significance of o.r. in business amp industry for scientific decisions.2. the primary

  What are the problems with americarsquos current medical

1.what concepts in the chapter are illustrated in this case? who are the stakeholders in this case?2. what are the

  Prepare a supplementary schedule of cash flows

What effect will reclassifying the investments have on the current ratio? Is Ross's true finan¬cial position stronger as a result of reclassifying the investments and evaluate Inspireds cash flows for the year.

  Make the present value of both prizes equivalent

Carol has won a prize in the "Wait To Spend" lottery. Specifically Carol has won the amount of $1500 but she must wait for 10 years to receive the money. Carol is in real need of cash and would rather receive a different prize: $525 today and then re..

  What is the firms cost of debt

A firm has a weighted average cost of capital of 10.295 percent and a cost of equity of 14.7 percent. The debt-equity ratio is 0.75. Tax rate is 32%. What is the firm's cost of debt? Sabrina's just paid an annual dividend of $0.88 per share. This div..

  What is the ratio of market value of equity to book value

A firm has current assets that could be sold for their book value of $20 million. The book value of its fixed assets is $58 million, but they could be sold for $88 million today. The firm has total debt with a book value of $38 million, but interest ..

  Specific interests of the different users of financial state

Identify two items or issues that cannot be derived from the financial statements of the two companies that you selected for your research. Explain why these items or issues would be of concern to investors and other stakeholders. In your rationale, ..

  What is the value of the swap

A company enters into a $35 million notional principal interest rate swap. What is the value of the swap?

  Compute the future cash flows

Compute Koda's weighted average cost of capital WACC and compute the future cash flows associated with the manufacturing of mobility vehicles and the net present value (NPV) of the project by filling in the blanks in the table below. Advise whether..

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