Find floating-rate payment in the second year

Assignment Help Finance Basics
Reference no: EM133076373

You enter a two-year interest rate swap with annual payments and a notional principal of $100 million. At the time you enter the contract, the one-year spot rate is 3% and the two-year spot rate is 5.5%. The forward rate for the second year is 8.1%. The floating-rate payment in the second year is expected to be:

Reference no: EM133076373

Questions Cloud

How can we monitor our network effectively : How can we monitor our network effectively without ourselves making unjustifiable intrusions upon users and their privacy?
What is the gross earnings of an employee : What is the gross earnings of an employee if he worked for 46 hours in one week at P45 an hour. He is paid one and a half times regular rate for hours worked
What is the project discounted payback period : 1. In periods 0-4, a project has the following cash flows: -3,000, 1000, 1000, 2,186, 500. Its cost of capital is 10 percent. What is the project's DISCOUNTED p
Compute the net cash inflows using liquidity : Selling and Administrative Expenses P1,500,000; and Income tax of 40%. Compute the net cash inflows using liquidity and yield preference theories
Find floating-rate payment in the second year : You enter a two-year interest rate swap with annual payments and a notional principal of $100 million. At the time you enter the contract, the one-year spot rat
Determining the correlation between portfolios : The Triad family of mutual funds allows investors to split their money between several portfolios managed by Triad. Portfolio C has an expected return of 10% an
Compute the net present value of the investment decision : The machine has a useful life of 5 years and a salvage value of P27,500. Compute the net present value of the investment decision
What is the yield to maturity on BZ outstanding debt : The 10-year US Treasury Bond has a yield of 1.7% and the market risk premium is estimated to be 5.4%. What is the yield to maturity on BZ's outstanding debt
Calculate the number of shares issued : Calculate the number of shares issued and the number of shares outstanding on Jan. 1, Mar. 1, June 30, and Sept. 30, 2019

Reviews

Write a Review

Finance Basics Questions & Answers

  What will be the firm''s value in case the loan is repaid

Annie owns a "shell firm"-this is a firm which is incorporated but has no activity whatsoever. Annie's shell firm is about to buy another firm for $900,000.

  The stock price of retro co is 65 investors required a 12

the stock price of retro co. is 65. investors required a 12 percent rate of return on similar stocks. if the company

  Measures of efficiency and profitability

How does anyone determine a companies measures of efficiency and profitability?

  What will be the value of the investment

Future value: Larry James is planning to invest $25,100 today in a mutual fund that will provide a return of 0.10 each year. What will be the value of the investment in 10 years?

  What should be the repurchase? price

The Dunn Corporation is planning to pay dividends of ?$540,000. There are 270,000 shares? outstanding, and earnings per share are ?$4

  Carry intermediate computations at furniture store

Carry your intermediate computations to at least three decimal places, and round your responses as specified in the table

  Assembly activity cost pool

How much total cost would be allocated to the assembly activity cost pool?

  Describe the effect of each of the eight accounting

Using information from Part a and the financial ratios in Exhibit 5.39, indicate possible signals that Millennial Technologies might have been manipulating its financial statements. Describe the effect of each of the eight accounting irregularities o..

  What is the cost of preferred stock after taxes

ABC is planning on issuing $20 million securities in bonds and $20 million in preferred stock. Current Preferred Stock price $48 Preferred Dividends $3.00.

  Probability of heads on a toss of a particular coin

You feel that ~p , the probability of heads on a toss of a particular coin is either 0.4, 0.5, or 0.6. Your prior probabilities are P(0.4) = 0.1, P(0.5) = 0.7, and P(0.6) = 0.2.

  Stock expected dividend yield for the coming year

If D0=$1.20, g (which is constant) = 4%, and P0 = $26.00, what is the stock's expected dividend yield for the coming year? Hint: You need to find D1 first.

  Estimate the free cashflows to the firm

a. Estimate the free cashflows to the firm each year for the next 3 years.

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