Four risk categories used to compute risk-weighted assets

Assignment Help Financial Management

Reference no: EM132014558

Various capital accounts of a bank are as follows:

Common Stock (Par) $4.88 million

Allowance for Loan Loss $7.95 million

Undivided Profit $14.79 million

Intermediate Term Preferred Stock $0.97 million

Subordinated Debt Capital $5.14 million

Surplus $9.93 million

Suppose that the bank has a quarter of its assets in each of the four risk categories used to compute risk-weighted assets. The total assets are $1097 million.

What is the bank’s Tier 1 capital in percent of risk-weighted assets, to the nearest 0.01%? (E.g., if your answer is 5.753%, record it as 5.75.)

Reference no: EM132014558

Questions Cloud

What is wing air weighted average cost of capital : Wing Air, Inc. has a target capital structure of 65% percent common stock. What is Wing Air's weighted average cost of capital?

Moving checkpoint to reduce staffing at plant : A project we are just beginning to undertake is moving a checkpoint to reduce staffing at a plant by 9 full time employees.

Warner cost of not taking the cash discount : What is Mr. Warner's cost of not taking the cash discount?

How much is the present value of stock : Assuming a required return of 10%, how much is the present value of stock?

Four risk categories used to compute risk-weighted assets : Suppose that the bank has a quarter of its assets in each of the four risk categories used to compute risk-weighted assets.

Bank asset grow over the next year for ratio not to fall : By what percentage can the bank’s asset grow over the next year for the ratio not to fall below this level?

What if rates suddenly fall by two percent instead : Bond J has a coupon rate of 6 percent and Bond K has a coupon rate of 12 percent. What if rates suddenly fall by 2 percent instead?

Discussion of the present value cost and benefits : Discussion of the present Value cost. Discussion of the present value benefits. Is the project feasible using NPV and B/C ration criteria?

What role does the tax deductibility of interest play : What role does the tax deductibility of interest play in encouraging debt financing at CPK?

User Account

All Pages