What is the market value of swap contract for Corporation

Assignment Help Financial Accounting
Reference no: EM133032949

Question - Corporation A borrows $100,000 from Corporation B on June 1, 2018. Corporation A will pay annual interest to Corporation B on June 1, 2019 and June 1, 2020 at a variable interest rate. Corporation A enters into an interest rate swap with Corporation C on June 1, 2018, where Corporation A will pay Corporation C interest at a level swap, and Corporation C will pay Corporation A interest at the variable interest rate. The spot rates on June 1, 2018 are 5% for a 1-year term and 5.75% for a 2-year term. The spot rates are the same on June 1, 2019. What is the market value of the swap contract for Corporation A on June 1, 2019, just after the interest payments due on that date have been made?

Reference no: EM133032949

Questions Cloud

Degrees of freedom for between groups : Carol is curious as to whether Australia has the same average petrol prices to New Zealand and Indonesia.
What is globalization in business : 1. What are some practices of Corporate Social Responsibility?
Prenatal effects of many environmental agents : Why is it difficult to determine the prenatal effects of many environmental agents, such as drugs and pollution?
What is meant by primary behavior pattern : What is meant by primary behavior pattern? Based on your results, what is your behavioral style?
What is the market value of swap contract for Corporation : What is the market value of the swap contract for Corporation A on June 1, 2019, just after the interest payments due on that date have been made
What is meant by primary behavior pattern : What is meant by primary behavior pattern? Based on your results,
Case study on markham hotel : Markham Hotel is considering expanding its meeting facility. The following table shows the 3 alternatives, the states of nature and their payoffs:
How much do you need to deposit every year : You do NOT plan to make additional savings during the years you travel. How much do you need to deposit every year in order
How much will Martt receive each year : The bank has agreed to this arrangement, based on an interest rate of 10% p.a. compounded monthly applied. How much will Martt receive each year

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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