Roe and retention ratio change

Assignment Help Finance Basics
Reference no: EM131923391

A bank has ROE of 12% and its retention ratio is 36%. It has assets of $849 million and the equity-to-assets ratio of 8.7%. The bank wants to maintain the equity-to-assets ratio of at least 6.2%. By what percentage can the bank's asset grow over the next year for the ratio not to fall below this level? Assume that the ROE and retention ratio do not change. Report the answer to the nearest 0.01% (e.g., if your answer is 15.27%, submit it as 15.27).

Reference no: EM131923391

Questions Cloud

Write the balance sheet for high yield fund : Write the balance sheet for HYT (Note: You just need a simple balance sheet like what we have done in class. It should have the aggregate equity.
Widely diversified investor : NVIDIA Corp. [NVDA] has a Beta of 1.45 (according to google finance) and a standard deviation of monthly returns of 9.6% since 2011.
What will happen to the wage of native workers : The 1986 Immigration Reform and Control Act (lRCA) makes it. What will happen to the wage of native workers if the penalties for hiring illegal aliens increase?
What should be the total price charged for a normal project : PRTI is a company whose primary business' focus is on upgrading servers for manufacturing companies.
Roe and retention ratio change : Assume that the ROE and retention ratio do not change. Report the answer to the nearest 0.01% (e.g., if your answer is 15.27%, submit it as 15.27).
What is the new equilibrium level of wages and employment : Suppose the supply curve of physicists is given by w = 10 + 5£, whereas the demand curve is given. What is the new equilibrium level of wages and employment?
By how much will the bond price change : A $1,000 par value bond with five years left to maturity has 6% coupon rate. Couponpayment is made annually and the bond is priced to have a 5% yield.
Illustrate the trend in the employment and wage of economist : Illustrate the trend in the employment and wage of economists as the market adjusts to this increase in demand.
Compute how much the account will contain : Since the construction industry is notorious for having slumps in the course of business where operational cash flow is constrained.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is crisp required return

The risk-free rate is 4%, the expected return on the first factor (r1) is 12%, and the expected return on the second factor (r2) is 8%. If bi1= 0.5 and bi2 = 0.8, what is Crisp's required return? Round your answer to two decimal places.

  What does the standard deviation measure

What does the standard deviation measure? Do you think it is a good measure for investors to use? Why?

  Develop and implement operational plans

Explain what operations planning is, and detail the processes that should be followed to develop and implement operational plans. Outline the risk analysis procedures that might be followed and the procedures that would be followed to develop cont..

  Jerry allison starts the month with a balance on his credit

jerry allison starts the month with a balance on his credit card of 1070. on the 10th day of the month he purchases 390

  Find the required return of portfolio

Treasury bills provide a 4% rate of return and the S&P 500's return is 16%. Find the required return of your portfolio.

  What is the funds required rate of return

Suppose you manage a $4 million fund that consists of four stocks with the following investments: If the market's required rate of return is 14% and the risk-free rate is 6%, what is the fund's required rate of return?

  Calculate nwc''s free cash flow for 2009.

Based on the final forecast, calculate NWC's free cash flow for 2009. How does this FCF differ from the FCF forecasted by NWC's initial "business as usual" forecast?

  Two future cash flows

Thus there are now two future cash flows--a cash flow of C1 = $34,000 at the end of year 1 and a further cash flow.

  Current value of the perpetual bond

Show the following: if inflation is 3 per cent per year and the bond's payments are fixed at $10, that the current value of the perpetual bond is $125.

  Compute patent amortization

Alpha Enterprises acquired a patent from Simpson Research Company on 1/1/01 for $4million. The patent will have a useful life of ten years, even though it's legal life is twenty years.

  After reading your report as well as comments by others on

after reading your report as well as comments by others on the teams the genesis team began to understand the

  How much interest will the borrower pay in a year

Suppose a bank estimates that the marginal cost of-raising loanable funds to make a $10 million loan to one of its corporate customers is 4 percent.

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