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!
Question:
A U.S company has a liability of € 10 million in fixed rate loans outstanding at 6%. A German company has a $15 million Floating Rate Note outstanding at LIBOR. The exchange rate is $1.5/ €. The U.S Company enters into a plain vanilla currency swap with the dealer in which it pays LIBOR on $15 million and receives the swap rate of 6.0% on the € 10 million. The German company also enters into a plain vanilla currency swap with the same dealer, in which it pays a swap rate of 6.10% on the € 10 million and receives LIBOR on $15 million. One-year LIBOR is currently at 5.2%.
Required:
(a) Calculate each party's net borrowing cost
(b) Graphically represent the principal cash flows
(i) At initiation and (ii) At maturity of the contract.
(c) Calculate the first- year cash flows for the US company, German company and the dealer. (Assume annual settlement)
(d) Hubert Group based in France will need a loan in Swiss Francs in the near future. The company has a comparative advantage in raising Euros at a cheaper cost compared to raising Swiss Francs on the debt market. Furthermore, the company expects interest rates in the Euro currency zone and Switzerland to rise in the near future.
Based on the interest rate expectations, structure the currency swap so that it is beneficial for Hubert Group.
National Australia Bank is listed on the Australian Securities Exchange with code NAB. The company has 2.2731 billion shares outstanding and the closing price on 7 Sept 2012 was $2
Chang and Fyffe (1971) assume that a ?rm has a ''long-run sales history of individual seasonal-style-goods SKUs or groups of such SKUs''. They propose to estimate demand by using r
Your boss is trying to figure out when to replace an important piece of machinery in your main production facility. The Siemens NR550, costs $5.45 million brand new and generally
Question 5 A company has a total investment of Rs 500,000 in assets, and 50,000 outstanding ordinary shares at Rs 10 per share (par value). It earns a rate of 15 per cent on its in
considering floatation on the stock exchange, produce a report explaining advantage of such a move
NPV calculation if we have Initial investment 60000,life is 3 year, net working capital is 15000, sale is 75000 per year, variable cost is 1000 per year, fixed cost is 5000 per yea
An investor buys a French government, 10-year bond, paying annual coupon of 4.5%. Face value = 1000. The investor is unsure of his investment horizon and considers 5 horizons: 5, 6
differentiate between pricing efficiency and allocative efficiency
Hello, can you help me to calculate the Discount rate and Internal Rate of Return?
1
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