Business, 14.11.2019 02:31 traybrown0690

Company x wants to borrow $10,000,000 floating for 5 years; company y wants to borrow $10,000,000 fixed for 5 years. their external borrowing opportunities are shown below:

a swap bank proposes the following interest only swap:

x will pay the swap bank annual payments on $10,000,000 with the coupon rate of libor; in exchange the swap bank will pay to company x interest payments on $10,000,000 at a fixed rate of 10.05%. y will pay the swap bank interest payments on $10,000,000 at a fixed rate of 10.30% and the swap bank will pay y annual payments on $10,000,000 with the coupon rate of libor - 0.15%.

(a) what is the qsd?

(b) what are the dollar gains to the swap bank. company x and company y? (10)

Answers: 3

Show answers

Another question on Business

Business, 21.06.2019 20:40

•broussard skateboard’s sales are expected to increase by 15% from $8 million in 2016 to $9.2 million in 2017. its assets totaled $5 million at the end of 2016. broussard is already at full capacity, so its assets must grow at the same rate as projected sales. at the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. the after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 40%. use the afn equation to forecast broussard’s additional funds needed for the coming year

Answers: 2

Answer

Business, 22.06.2019 09:30

Cash flows during the first year of operations for the harman-kardon consulting company were as follows: cash collected from customers, $385,000; cash paid for rent, $49,000; cash paid to employees for services rendered during the year, $129,000; cash paid for utilities, $59,000. in addition, you determine that customers owed the company $69,000 at the end of the year and no bad debts were anticipated. also, the company owed the gas and electric company $2,900 at year-end, and the rent payment was for a two-year period.

Answers: 1

Answer

Business, 22.06.2019 19:00

James is an employee in the widget inspection department of xyz systems, a government contractor. james was part of a 3-person inspection team that found a particular batch of widgets did not meet the exacting requirements of the u.s. government. in order to meet the tight deadline and avoid penalties under the contract, james' boss demanded that the batch of widgets be sent in fulfillment of the government contract. when james found out, he went to the vice president of the company and reported the situation. james was demoted by his boss, and no longer works on government projects. james has a:

Answers: 3

Answer

Business, 22.06.2019 19:10

According to the textbook chapter, “the emotional connection of distinguishing differences and conflict”, which of the following groups of terms describes best the skills/resources that managers need when managing differences in their organization? energy, commitment, tolerance, and appreciation energy, adequate funding, tolerance, and appreciation funding, tolerance, a strong hr department, and tolerance energy, a strong hr department, patience, and strong leadership skills

Answers: 3

Answer

You know the right answer?

Company x wants to borrow $10,000,000 floating for 5 years; company y wants to borrow $10,000,000 f...

Questions