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!
A company enters into a five-year interest rate swap along with a swap bank where it agrees to pay the swap bank a fixed-rate of 9.75 percent yearly on a notional amount of DM15,000,000 and receive LIBOR - ½%. As of the second reset date, find out the price of the swap from the corporation's viewpoint; assume that the fixed-rate at which it can borrow has risen to 10.25 percent.
Solution: On the reset date, the present value of the future floating-rate payments the corporation will receive from the swap bank based upon the notional value will be DM15,000,000. The present value of a hypothetical bond issue of DM 15,000,000 along with three remaining 9.75% coupon payments at the new fixed-rate of 10.25 percent is DM14,814,304. This sum denotes the present value of the remaining payments the swap bank will receive from the corporation. So, the swap bank should be willing to buy and the corporation should be willing to sell the swap for DM15, 000, 000 - DM14, 814, 304 = DM185,696.
Types of Mutual Funds The objectives of a Mutual Fund are as follows: To provide an opportunity for lower income groups to acquire property without much difficulty in the
Q. Example on compound value of the single flow? Mr. X invests Rs. 1000 at 10% is compounded yearly for three years. Compute value after three years. FV = PV (1+i) n FV
Q. Definition of financial leverage? One of the goals of planning an appropriate capital structure is to maximize the return on equity shareholders fund or else maximize the ea
Suppose spot Swiss franc is $0.7000 and the six-month forward rate is $0.6950. What is the minimum price which a six-month American call option along with a striking price of $0.6
Internal Rate of Return (IRR) : This rate attempts to find the earnings rate, which equates the current value of the streams of earnings to the investment outlay. IRR is descri
The horizon price can be determined by incorporating Option-Adjusted Spread (OAS) into a total return analysis. But this requires a valuation mo
Explain how a firm determines the optimal level of current assets. The best possible level of working capital is determined by finding the amount that balances the need for liq
The Mountain Fresh Company had earnings per share (EPS) of $6.32 in 2006 and $11.48 in 2011. The company pays out 30 percent of its earnings as dividends per share (DPS), and the
R eceipt of bids and bid opening We discussed how to prepare the bids and to publish them in the earlier sub section. Now let us see how to receive and open bids. To receiv
An offer given by charitable trust to develop and build a facility on a 10000 sqmt of plot in a prime locality of pune where 5000 sqmt of area will be used by the trust for housing
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd