Homework Help is Here – Start Your Trial Now!
Business
Finance
The marginal cost of funds to XYZ Bank Limited is: Demand deposits 6.50% Time deposits 7.50% Savings deposits 8.50% Debentures 11.75% Common equity 22.0% On 31st December 2021, ZED Bank Limited had the following balance sheet: Assets Cash K' Million Liabilities and Equity K' Million 600 Demand deposits 2,100 Investments in securities 1,100 Time deposits 2,800 Loans 5,100 Savings deposits 600 Debentures 600 Common equity 700 Total 6,800 6,800

The marginal cost of funds to XYZ Bank Limited is: Demand deposits 6.50% Time deposits 7.50% Savings deposits 8.50% Debentures 11.75% Common equity 22.0% On 31st December 2021, ZED Bank Limited had the following balance sheet: Assets Cash K' Million Liabilities and Equity K' Million 600 Demand deposits 2,100 Investments in securities 1,100 Time deposits 2,800 Loans 5,100 Savings deposits 600 Debentures 600 Common equity 700 Total 6,800 6,800

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
See similar textbooks
icon
Related questions
Question

Compute the weighted-average marginal cost of funds for XYZ Bank Limited.

B. Explain why it is important to use the marginal cost of funds as opposed to average cost of funds in making loan pricing decisions.

The marginal cost of funds to XYZ Bank Limited is: Demand deposits 6.50% Time deposits 7.50% Savings deposits 8.50% Debentures 11.75% Common equity 22.0%
Transcribed Image Text:The marginal cost of funds to XYZ Bank Limited is: Demand deposits 6.50% Time deposits 7.50% Savings deposits 8.50% Debentures 11.75% Common equity 22.0%
On 31st December 2021, ZED Bank Limited had the following balance sheet: Assets Cash K' Million Liabilities and Equity K' Million 600 Demand deposits 2,100 Investments in securities 1,100 Time deposits 2,800 Loans 5,100 Savings deposits 600 Debentures 600 Common equity 700 Total 6,800 6,800
Transcribed Image Text:On 31st December 2021, ZED Bank Limited had the following balance sheet: Assets Cash K' Million Liabilities and Equity K' Million 600 Demand deposits 2,100 Investments in securities 1,100 Time deposits 2,800 Loans 5,100 Savings deposits 600 Debentures 600 Common equity 700 Total 6,800 6,800
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS