The most common trade finance products

Assignment Help Financial Management

Reference no: EM131972630

1. Breifly describe how "Phi" influences the call option premium.

2. The most common Trade Finance Products used in International Trade are Documentary collections, Documentary Credits and Guarantees or Standby Letters of Credit and Trade Loans.

3. A small office building in Hutchinson is expected to generate annual NOI of $120,000 in each of the next five years. It can be purchased at a going-in cap rate of 12 percent. If you purchase the property, you will expect to hold it for five years. Your required rate of return on this investment is 15 percent. Estimate the property’s reversion value (V5) and current market value (V0) under each of the following assumptions:

a) The terminal cap rate based on comparable sales is 14 percent (assume NOI in year 6 will also be $120,000).

b) NOI will grow at a constant rate of 2 percent after the end of your holding period.

c) The property will appreciate by 3 percent per year over the initial purchase price (P0).

d) The property’s initial market value (V0) will appreciate by 3 percent per year.

Reference no: EM131972630

Questions Cloud

Working capital and maintenance of good current ratio : If a company is a monopoly and subsidized by government, does that change the need for working capital and the maintenance of a good current ratio?

Company has been working to develop newest product in market : Your company has been working to develop the newest product in the market. What facts would you consider to make your recommendation?

Risk-free rate-how could you arbitrage : Risk-free asset in the US: 0.04 year, Risk-free rate in Australia: 0.03 year, how could you arbitrage?

Assume piece of equipment : Let's examine your ability to calculate NPV. Let's assume a piece of equipment has an implied discount rate of 8% and an initial cost of $1,000,000.

The most common trade finance products : The most common Trade Finance Products used in International Trade are Documentary collections, Documentary Credits and Guarantees or Standby Letters of Credit

Estimate the unlevered beta for time warner : Estimate the unlevered beta for Time Warner.

The challenger should be leased or rejected : A manufacturing company has some existing semiautomatic production equipment that it is considering replacing. The challenger should be leased or rejected?

Make any capital investment decision : What is the primary factor/measurement used to make any capital investment decision?

What is weighted average cost of capital : Significantly lower because of the continuing profit prospects in the global energy market, what is its weighted average cost of capital?

User Account

All Pages