Question One a) Explain the role of the main counterparties (sponsors) to a concession agreement under a Special Purpose Vehicle (SPV). b) Why is the SPV, sometimes, considered as an appropriate or optimal strategy to execute certain economic activities? Explain your answer. c) Explain why sometimes sponsors prefer using project financing as opposed to using corporate financing. d) Explain the term project finance in the context of our course? e) Outline the main risks associated with project finance. For each risk explain the suitable risk management strategy.
Question One a) Explain the role of the main counterparties (sponsors) to a concession agreement under a Special Purpose Vehicle (SPV). b) Why is the SPV, sometimes, considered as an appropriate or optimal strategy to execute certain economic activities? Explain your answer. c) Explain why sometimes sponsors prefer using project financing as opposed to using corporate financing. d) Explain the term project finance in the context of our course? e) Outline the main risks associated with project finance. For each risk explain the suitable risk management strategy.
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
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Question One
a) Explain the role of the main counterparties (sponsors) to a concession agreement under a
Special Purpose Vehicle (SPV).
b) Why is the SPV, sometimes, considered as an appropriate or optimal strategy to execute certain economic activities? Explain your answer.
c) Explain why sometimes sponsors prefer using project financing as opposed to using corporate financing.
d) Explain the term project finance in the context of our course?
e) Outline the main risks associated with project finance. For each risk explain the suitable risk management strategy.
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