24. Rockstar Financial is renegotiating a $7 million dollar loan with Amazon, It ischarging an upfront fee of 30 basis points, servicing fee of 10 basis points, and anterest rate of 7.5%. If the percentage change in the credit risk for Amazon is 3.2%,chen what should the duration be on the loan to make this acceptable for bothRockstar Financial and amazon if the cost of funds for Rockstar Financial is 5.5%?A) 44.89 yearsO B) 20 yearsC) 13.64 yearsD) 34.1 yearsE) 10.6 years

Loan means the amount borrowed by an individual or a business firm for purchasing personal assets or…

- Rockstar Financial is renegotiating a $7 million dollar loan with Amazon, It is arging an upfront fee of 30 basis points, servicing fee of 10 basis points, and a erest rate of 7.5%. If the percentage change in the credit risk for Amazon is 3.2%, en what should the duration be on the loan to make this acceptable for both ckstar Financial and amazon if the cost of funds for Rockstar Financial is 5.5%? DA) 44.89 years B) 20 years C) 13.64 years D) 34.1 years E) 10.6 years

- Rockstar Financial is renegotiating a $7 million dollar loan with Amazon, It is arging an upfront fee of 30 basis points, servicing fee of 10 basis points, and a erest rate of 7.5%. If the percentage change in the credit risk for Amazon is 3.2%, en what should the duration be on the loan to make this acceptable for both ckstar Financial and amazon if the cost of funds for Rockstar Financial is 5.5%? DA) 44.89 years B) 20 years C) 13.64 years D) 34.1 years E) 10.6 years

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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Similar questions

15)
The Kangal Enterprise needs to increase its working capital by Rs 3.5 million for which it will borrow from the Banque de Fraude at 18% per year, for one year. Banque de Fraude is generously extending Kangal Enterprise a revolving credit of Rs 4.5 million, with a compensating balance of only 15.5% and commitment fees rate of 3.5%. Required [a] Calculate the interest on discount & collection basis [b] Calculate the overall cost of the annual revolving credit agreement [c] Approximately how much should Kangal Enterprise utilize of the precious 4.5 million revolving credit agreement, to fulfill its requirement of raising working capital by about 3.5 million and at what overall cost?
Please answer this quesiton thank you
Consider two 1-year loans with a principal of $1 million and a default probability of 2% each. Assume that if one loan defaults, the other does not. Assume that in the event of default, the loan leads to a loss that can take any value between $0 and $1 million with equal probability, i.e., the probability that the loss is higher than $x million is 1-x. If a loan does not default, it yields a profit equal to $0.02 million. a) Compute the 1-year 99% Value at Risk (VaR) and Expected Shortfall (ES) of a single loan. b) Compute the 1-year 99% VaR and ES for the portfolio of both loans. c) Does the VaR and the ES satisfy the subadditivity property in this case?
solve without chat gpt A bank is offering aloan of $25,000 with a nominal interest rate of 18% compoundedmonthly, payable in 60 months. (Hint: The loan origination fee of2% will be taken out from the loan amount.)a) What is the monthly payment?b) If a loan origination fee of 2% is charged at the time of theloan, what is the What is the monthly payment?
Jolly Banker is calculating the loan price for a $500,000 operating loan to Kelly business. If approved, this loan will be funded with 35% equity capital, and the remaining funds will come from the bank's debt capital. You have the following information about your bank’s outlays: Administrative costs 0.45% Cost of debt 7.00% Cost of equity 5.00% Probability of loss 0.55% Fees paid by the borrower 1.00% Calculate the weighted average cost of debt for this funding request. (Enter your answer in percentage. Round your answer to 2 decimal places)
Please answer it in a comprehensive and detail manner with step by step algorithm. No excel's sheet solution.
Ford has a 5 year $100m fixed rate loan with Citibank at 0.061 (annual rate). Ford now thinks rates will go lower and calls Goldman Sachs for a swap and receives a quote of 0.029 / 0.030 (annual rate) against 6m LIBOR flat and executes the swap. Assume at the next rate reset, 6m LIBOR is 0.018 (annual rate). What is Ford's net effective annual interest rate for that rate reset in decimal terms to three decimal places? (eg 5.10% = 0.051)
Full solution please. i need dis30mins. Rather than paying P100,000 in annual lathe machine rental for the next ten years, XYZ machine shop looked for a bank that would lend them a P1,000,000 loan with a 6% interest rate for a brand-newlathe machine. The shop would put P100,000 of the rental savings into a savings account and receive an annual interest rate of 18 percent. A.When comparing these two options, what will be the difference in revenue and expenses? B.Illustrate the detailed cashflow. C.What economic approach or analysis will be used to solve the problem? Justify why.
3.-DO IT IN EXCEL, AND SHOW THE FORMULASThe main supplier of Productos Adiós, S.A., offers you the option of a Cash Discount of 1.5% if you pay before two weeks. You should seriously evaluate this alternative to try to be more efficient in your accounts payable. You can use the direct lending facility that charges interest in advance, at a rate of 14.5% and an origination fee of 1%.This supplier's billing is $450,000 for a one-month term. What is the difference between the supplier's discount and the sum of commission and interest on the financing? A) $476.39 B) None of the above C) $660.87 D) $2,904.26

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