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Tom has chosen to accept an adjustable rate mortgage. He qualified at a fully indexed rate of 7.5%, but is offered 6.0% as a discounted interest rate for the first 3 years of his loan. Tom 3/1 ARM will be based on the LIBOR index which stands at 4.5% today. The interest rate caps for his loan are 2/1/6.
A). What percentage is the lender margin for the loan?
B). What is the maximum interest rate & how long does Tom have to pay on the loan?
C). In year seven, Tom's ARM rate is about to adjust. The current arm rate has been 7.75%, but the index rate is now 5.25%. Taking into account the annual interest rate cap and the margin for His loan, what will the new interest rate be?
Which project would be selected, assuming they are mutually exclusive, using each ranking method? Which should be actually selected?
The firm has an aftertax cost of debt of 6.3 percent and a cost of equity of 12.6 percent. What debt-equity ratio is needed for the firm to achieve their targeted weighted average cost of capital?
Chuck Tomkovick is planning to spent $25,000 today in mutual fund that will offer a return of eight percent each year. What will be the value of investment in ten years?
the Balance Sheet, income statement, and statement of cash flows for GameStop Corp. Excel Sheet MUST be able to be edited. Both horizontal and vertical analyses, z-scores, and ratios must be complete for all three years.
Explain Maximum price that can be paid for the bond and what is the maximum price you should be willing to pay for the bond
Decision tree analysis shows a project to have several possible outcomes the best of which has an net present value of $12M computed over a 5-year life. This best case path has an overall probability of occurring of 20 percent.
Assume an index of small company stocks started in 1946 at 10, and the index level was 1890.59 in 2001. Compute the capital gains yield of the small firm stocks for the period?
After that, the company has stated that the annual dividend will be $1.25 per share indefinitely. What is this stock worth to you per share if you demand a 10.8 percent rate of return on stocks of this type?
A project has the following estimated data: price = $68 per unit; variable costs = $44 per unit; fixed costs = $18,000; required return = 10 percent; initial investment = $40,000; life = five years. Ignoring the effect of taxes, what is the accoun..
Management anticipates an increased working capital need of $3,000 for the year. What will be the effect of the price increase on the firm's FCF for the year?
The company has a cost of capital of 22% The after tax cost of debt is 7% the cost of equity is 32% What is the Net present value.
In which case it will receive an additional $100,000 at t = 1 but no cash flows after t = 1. Assuming that the cost of capital remains at 12%, what is the estimated value of the abandonment option?
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