Why is the rate of Fixed Rate Mortgage higher than Adjustable Rate Mortgage? O Liquidity risk premium O Interest rate risk premium O Credit risk premium O ESG risk premium

Q: 3.3 Kapoor Bhd issued 4 percent debentures with a nominal value of RM40,000,000 on 1 January x1. The…

A: Given, Nominal value of debenture= RM40,000,000 Discount = 2.5% Issue cost incurred = RM1,000,000.…

Q: important to manage transaction exposure

A: The RISK - posed by firms participating in international commerce that currency exchange rates will…

Q: A $1,000 par bond with an annual coupon has only one year until maturity. Its current yield is…

A: Given that: Current Yield= 6.713% Price of the bond=(Coupon+1000)1.10............................(1)…

Q: The management of Charlton Corporation is considering the purchase of a new machine costing…

A: Cash payback period = Initial investment/Net cash flow per year

Q: You expect that Bean Enterprises will have earnings per share of $2 for the coming year. Bean plans…

A: Given, In this question, by using the given data, we have to find the price of the share of Bean.

Q: Mr. Harrington had a new heating system installed in his office. The balance owing to the heating…

A: Here,

Q: Given the following, determine the

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: A debt of P10,000 with yearly interest of 24% is to be amortized over the next 6 years with the…

A: Debt paid in equal annual payment from year 1 to year 6. Amortization table used to display the…

Q: Cash flows estimation and capital budgeting: You are the head of finance department in XYZ Company.…

A: The present value method is a method of finding the profitability of a project by discounting its…

Q: A ​$27,000 bond with interest at 5.3​% payable​ semi-annually and redeemable at par is bought two…

A: Face Value = $27,000 Coupon Rate = 5.3% Time Period = 2 Years Yield = 6.6%

Q: The operating activities section of the Statement of Cash Flows includes everything except:

A: The operating activities section of the Statement of Cash Flows includes everything except: Ans :…

Q: What is the maximum amount of money created from a $3 million deposit in the banking system if the…

A: Maximum amount of money created will be Maximum amount of money = Total Deposits * 1 / Required…

Q: 1. Calculating Returns Suppose a stock had an initial price of $87 per share, paid a dividend of…

A: percentage total return=(End value-Beginning value+Dividend)/Beginning value

Q: Explain Anti-dilutive Security

A: Explanation to Securities Securities are referred to as the tradeable financial instruments which…

Q: The yield on 1-year Treasury securities is 6%, 2-year securities yield 6.2%, 3-year securities yield…

A: Spot rate in year 1 (S1) = 6% S2 = 6.2% S3 = 6.3% S4 = 6.5%

Q: cost of the assembly system is $3 million with life expectancy of 10 years, annual operating cost of…

A: NPV= Present value of cashinflows - Present value of cashoutflows. If results are positive then it…

Q: A debt of $1908 with interest at 6.3% compounded annually is to be repaid by equal payments at the…

A: Solution:- When a loan is taken, it is to be repaid in lump sum or in installments. If it is paid in…

Q: Border Crossing has no debt and a cost of capital of 11.2 percent. Assume the firm switches to a…

A: Weight of debt and equity: Debt = 0.25 /1.25 = 0.2 Equity 1/1.25 = 0.8

Q: first question

A: Financial ratios refer to the magnitude of two values that should be taken from the firm’s…

Q: Assuming that the mandate to a portfolio manager was to invest in a broadly diversified portfolio of…

A: Portfolio is referred as the collection of the financial investments such as - commodities, cash…

Q: Direction: Solve what is being asked and show your complete and neat solution. (ROUND OF PV FACTORS…

A: The annuity amount can be calculated with the help of present value of annuity function

Q: 6c A large profitable corporation is considering a capital investment of $50.000. The equipment has…

A: Tax for year 2 will be calculated on net income. Tax for year 2 =(Annual gross…

Q: A mortgage of ​$161000 is to be repaid by making payments of ​$1191 at the end of each month. if…

A: Mortgage repayment in equal amounts is a type of annuity. Annuity can be defined as a series of…

Q: Jane requested a loan from a bank amounting to P405,630 to contin her small business. But she only…

A: Interest is an additional amount charged on the amount. It can be income and expense. For the lender…

Q: Compute the 5-month moving average and 7-month moving average of the data below.

A: Moving average is a technique used to analyze data points in a data set. The moving average for one…

Q: What is the present value of a $90,000 annual annuity for 10 years with an additional $1,000,000…

A: The present value of investment is the sum of present value of annuity and the present value of…

Q: An employee obtained a loan of P486,555 at the rate of 20.774% compounded bimonthly to build a…

A: Loan amount is P486,555 Interest rate is 20.774% Compounded bimonthly To Find: Nominal rate…

Q: Compute the future value of the following annuity investments: s 1. P6,000 quarterly investment at…

A: The future value of the annuity can be calculated with the help of annuity function

Q: Donair company is interested in purchasing a new piece of equipment. It will not replace an old…

A: The branch of financial management dealing with evaluation and selecting of new projects for a…

Q: MMM Scents Shop has just opened its store. Upon reviewing its operations, the owner noticed that the…

A: In terms of business, Liquidity is the ability of the organization to use cash whenever it needs;…

Q: Greg owes two debt payments – a payment of $5316 that was due in 13 months ago and a payment of…

A: The date at which values of all payments are calculated by compounding past and discounting future…

Q: Complete the following table and compute the project’s conventional payback period. For full credit,…

A: Payback period is the period within which the sum invested by the company in a project will be…

Q: 2. Rearden Metal needs to order a new blast furnace that will be delivered in one year. The…

A: NPV is the difference between Present Value of cash Inflows and Initial Investment.

Q: Calculate the company's WACC. (Do not round intermediate calculations and enter your answer as a…

A: Weighted average cost of capital (WACC) refers to the joint cost of company's capital from all the…

Q: Find the value of his account when he is 60 years old

A: Future Value of Annuity It represents the future worth of the present annuity stream of cash flows…

Q: E.) Is a contractual financial product sold by financial institutions that is designed to accept and…

A: E. The Correct option is 'a. Annuity'.

Q: You have a loan outstanding. It requires making 8 annual payments at the end of the next 8 years of…

A: Present value is defined as the sum of the funds, which are used to get invested for achieving the…

Q: If you borrowed S 15,000 to be repaid in 20 equal quarterly payments and after your 10th payment you…

A: Loan Amount = $15,000 Number of payments = 20 quarterly payments Interest rate = 12% (compounded…

Q: Which of the following roles is considered a main objective of credit rating agencies? a. Granting…

A: A credit rating agency is a company that assigns credit ratings that assess a debtor's ability to…

Q: Bilbo Baggins has just purchased a home and taken out a $400,000 mortgage. The mortgage has a…

A: The monthly payment amount can be calculated with the help of present value of annuity function

Q: For the following ordinary annuity, determine the size of the periodic payment Present Payment…

A: Present Value of Ordinary Annuity refers to the concept which dictates the discounted value of a sum…

Q: Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that they…

A: When a company has to chose one out of two or more investment options with same life, a present…

Q: On the day his son was born, a father deposited to a trust company a sufficient amount of money so…

A: Future value of an investment is the value of total money in the investment account at a future…

Q: college can purchase a telephone system for $35000 or lease a system for 5 years for a front-end…

A: Present value analysis is a technique for evaluating capital budgeting decisions. A company should…

Q: a. WACC b. Aftertax cost of debt

A: Given :  Capital Structure  Weights  Cost (%) Common Stock  65% 10% Preferred stock  10% 4%…

Q: You use the Black Scholes model to price a Call option on a stock with discrete dividends. The…

A:

Q: Locust Inc. owes ​$20,000.00 to be repaid by monthly payments of ​$510.00. Interest is 6​%…

A: Since you have asked a multiple subpart question, we will answer the first three subparts for you.…

Q: Gray Manufacturers' stock currently sells for S50.00 per share. The dividend is projected to…

A: Stock price would grow each year with the growth rate of dividend.

Q: Dallas Pierce's most recent credit card statement follows. His finance charge is 18% APR. Calculate…

A: (Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Billy Brown, owner of Billy refrigeration unit. The van would cost $99,000, have an eight-year…

A: Cost of Van purchased - $99,000 Cost of savings - $19,500 Increase in sales - $3,600 (1,800 x $2)

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.