Reference no: EM13973468
An English company with a subsidiary in the United States is seeking alternatives for funding of USD 20 MM to three years for its subsidiary.
The first possibility is paid GBP in England with a AAA risk, convert GBP USD to provide resources to its subsidiary.
The second is the subsidiary obtains funding directly in the United States, the problem is that the subsidiary has a BBB credit risk and pay a higher rate on the loan in GBP in England.
In the first possibility subsidiary would have to generate flows for the loan, the problem is that would be generated in USD and should be changed to GBP to cover the interest and the loan would generate exposure to exchange rate risk
Question
In the second alternative is no risk of exchange rate but most serious?
For the moment I am not happy with any of the possibilities presented?
The investment bank has a new alternative using a swap.?
The Bank has a AAA North American client seeking cover exchange risk with some operations in England, they have a maturity of 3 ?
years.
England rate risk AAA 10%
AAA North America 9% rate risk
|
Explain the business problem or opportunity
: Prepare an 11- to 15-slide Microsoft® PowerPoint® presentation for the senior management team based on the business problem or opportunity you described in Week 3 and 4. Draw on material you developed in the Week 3 and 4 assignments.
|
|
What sort of supplemental materials make a difference
: What do you think of elementary school social studies texts being used in today's classrooms? Have they improved since you were a child? How have they changed? What sort of supplemental materials make a difference?
|
|
Determine the work and heat transfer for each process all in
: A piston-cylinder assembly contains 2lb of water, initially, at 100 lbf/in.2 and 400°F. The water undergoes two processed: in series: a constant-pressure process followed by a constant volume process. Sketch T-v and p-v diagrams showing the key state..
|
|
What mix of immigration policies would you recommend
: You are the newly appointed immigration advisor to the Obama administration. You have been asked to prepare a brief report for the President outlining what type of immigration admissions and control policies he should adopt in order to provide the..
|
|
Alternatives for funding of usd
: An English company with a subsidiary in the United States is seeking alternatives for funding of USD 20 MM to three years for its subsidiary.
|
|
Company focuses its marketing efforts
: Retailers like Wal-Mart and Kmart are considered to be members of which organizational market?
|
|
Determining the lindley operating income
: It had $8,000 of bonds outstanding that carry a 7.5% interest rate, and its federal-plus-state income tax rate was 40%. How much was Lindley's operating income, or EBIT?
|
|
What is a qualitative analysis
: What is a qualitative analysis? Give one example on how this method can be used to improve performance in a healthcare setting. What is meant by the term "second shift." What proportion of household labor, on the average, do women perform
|
|
Warrant starting the business
: The investor will go forward only if she thinks the firm can provide a 13.5% return on the invested capital, which means that the firm must have an ROE of 13.5%. How much net income must be expected to warrant starting the business?
|