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Company A needs $30 million at a floating-rate to fund a 5-year project while Company B desires $30 million at a fixed rate to complete its 5-year construction plans. Company A and Company B have been offered the following rates per annum on a $30 million 5-year loan:
Fixed rate Floating rate Company A: 12.0% LIBOR + 0.1% Company B: 13.4% LIBOR + 0.6%
a. What might explain the differences in the rates offered the two companies?
b. What is the QSD in this case?
c. Design a swap that will net a bank, acting as intermediary, 0.1% per annum and that will appear equally attractive to both companies.
Flavortech Inc. expects EBIT of $2,000,000 for the coming year. what is its expected dividend payout ratio?
When the interests of the shareholders and of the management of a firm are not aligned, this is called ___
Calculate the firm's current and quick ratios for each year. Compare the resulting time series for these measures of liquidity.
Rogers Inc. had 600,000 shares of $2 par common stock outstanding at the end of both 2013 and 2014. Retained earnings at the end of 2013 amounted to $2,160,000. No dividends were paid during 2014, and net income for the year was $600,000. Determine R..
Stock Y has a beta of 1.3 and an expected return of 8.1 percent. Stock Z has a beta of 0.7 and an expected return of 11 percent. What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other?
She has also decided that she will only make 3 out of the 5 sandwiches, and not more than 150 of any one of those three sandwiches.
If the firm converts to 50 percent debt, what will the company's WACC be?
1. What are 3 fundamental decisions that are of concern the finance team? What is the impact of these on the balance sheet?
The real risk-free rate of interest is 3%. Inflation is expected to be 1% this year and 6% during the next 2 years. Assume that the maturity risk premium is zero. What is the yield on 2-year Treasury securities? What is the yield on 3-year Treasury s..
Jallouk Corporation has two different bonds currently outstanding. Bond M has a face value of $80,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $2,900 every six months over the subsequent eight years, and ..
Amortization schedule with periodic payments. What is the amortization schedule of the first six? payments?
Caper Energy Exploration reports that corporation assets are valued at $191,036,000, What is the book value for a share of Casper Stock?
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