A firm paid interest of $60 this year. Last year, they had $400 in debt. This year, they had $800 in debt. What was their CF to creditors? Hint: CF to creditors = interest paid - net borrowing Net borrowing = debt this year - debt last year
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A firm paid interest of $60 this year. Last year, they had $400 in debt. This year, they had $800 in debt. What was their CF to creditors?
Hint: CF to creditors = interest paid - net borrowing
Net borrowing = debt this year - debt last year
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- Vigo Vacations has $200 million in total assets, $5 million in notes payable, and $25 million in long-term debt. What is the debt ratio?In the example below, we will use year-end assets. Bank A receives $70 in deposits at 5% and, together with 40 in equity, makes a loan of $90 at 7%. The remaining of assets is G-Bond. We will ignore taxes for the moment. NIM=Profit/Interest revenue Bank A Loan 7% $90 G-Bond 5% ? Deposits 5% $70 Equity $40 Total Assets $? Total Equity and Deposit $110 The amount of G-bond is $50 $70 $20 $40 $80 $60 $30 $10Using the balance sheet below for a financial institution, and the duration of asset is 3.5 years, the duration of liabilities .5 years. Assets Reserves T-bills Mortgages Liabilities 5 m Money Market Deposits 5 m 50 m 1-year CDs 85 m 40 m Capital 10 m 5 m Commercial Loans What is the Duration Gap of this company? greater than 3 years 3 years O less than 3 years
- Consider the following Balance Sheet for Cutting Edge Commercial Bank(CECB) (in millions) ASSETS LIABILITIES Floating rate mortgages 120 Demand deposits 110 (currently 14% annually) (currently 5% annually) 30 years fixed rate loans 1 year CD 50 (currently 9% annually) 80 (currently 8% annually) Equity 40 200 200 1. What is CECB expected net interest income (NII) at year-end? 2. What is CECB expected net interest income at year end if interest rates fell by seven percent (7%). 3. What is CECB expected net interest income at year end if interest rates grew by 300 basis points on assets, but decline by 2% on liabilities.Consider the following Balance Sheet for Forward Thinking Commercial Bank(FTCB) (in millions) ASSETS LIABILITIES Floating rate mortgages 250 Demand deposits 300 (currently 14% annually) (currently 5% annually) 30 years fixed rate loans 1 year CD 50 (currently 9% annually) 120 (currently 8% annually) Equity 20 370 370 a. What is FTCB expected net interest income (NII) at year end? b. What is FTCB expected net interest income at year end if interest rates fell by seven percent (7%). c. What is FTCB expected net interest income at year end if interest rates grew by 300 basis points on assets, but decline by 2% on liabilities.Suppose a bank has the following Balance Sheet Assets Liabilities RSA = 120 RSL = 90 FRL = X FRA = 110 (Fixed rate liabilities can be found if needed by determining what number it must be to balance the balance sheet.) Suppose all the Assets and Liabilities were set last year when the interest rate was 10, if the interest rate has changed by 2% since that time what is the current cost from all of the bank's liabilities? Your Answer:
- Balance Sheet (dollars in thousands) and Duration (in years) Duration AmountT-bills. 0.5 $ 90T-notes 0.9 55T-bonds 4.393 176Loans 7 2,724Deposits. 1 2,092Fed. funds 0.01 238Equity 715What is the average duration of all the assets? What is the average duration of all the liabilities? What is the FI’s leverage-adjusted duration gap? What is the FI’s interest rate risk exposure? If the entire yield curve shifted upward 0.5 percent (i.e., ΔR/(1 + R) = 0.0050), what is the impact on the FI’s market value of equity? If the entire yield curve shifted downward 0.25 percent (i.e., ΔR/(1 + R) = −0.0025), what is the impact on the FI’s market value of equity?Consider the following Balance Sheet for Forward Thinking CommercialBank(FTCB) (in millions) Assets Liabilities Floating rate mortgages (currently 14% annually) 250 Demand deposits (currently 5% annually) 300 30 years fixed rate loans 120 1 year CD (currently 8% annually) 50 Equity 20 370 370 a. What is FTCB expected net interest income (NII) at year end? b. What is FTCB expected net interest income at year end if interest rates fell by seven percent (7%). c. What is FTCB expected net interest income at year end if interest rates grew by 300 basis points on assets, but decline by 2% on liabilities.pls refer to the attached image 1. What is the principal balance of the loan as of January 1, 2022? 2. What is the principal balance of the loan as of December 31, 2024, after payment was made? 3. How much total amount of interest that will be paid for the next 5 years? 4. Suppose that ABC company can only afford to pay P400,000 every end of each year, what is the maximum amount of loan that company can avail? (Note: loan term and interest rate remain the same)
- Suppose the Schoof Company has this book value balance sheet: $30,000,000 Current assets Fixed assets Total assets Short-term debt Long-term debt Common equity Total capital $ 70,000,000 $ $100,000,000 Current liabilities Notes payable The notes payable are to banks, and the interest rate on this debt is 9%, the same as the rate on new bank loans. These bank loans are not used for seasonal financing but instead are part of the company's permanent capital structure. The long-term debt consists of 30,000 bonds, each with a par value of $1,000, an annual coupon nterest rate of 7%, and a 25-year maturity. The going rate of interest on new long-term debt, rd, is 12%, and this s the present yield to maturity on the bonds. The common stock sells at a price of $60 per share. Calculate the firm's market value capital structure. Do not round intermediate calculations. Round the monetary values to the nearest dollar and percentage values to two decimal places. Long-term debt Common stock (1…G. A Man borrowed P5,000 from a bank and agreed to pay the loan at the end of 9 months. The bank discounted the loan gave him P4,000 in cash. CO2 16. What was the rate of discount? a. 2% Б. 12% C. 13% d. none of the above Co2 17. What was the rate of interest? a. 25% CO2 18. What was the rate of interest for one year? a. 3% Co1 19. It is the rate of interest for the same period b. 22% c. 23% d. none of the above b. 34% c. 33% d. none of the above d. none of the above а. d b.r Co1 20. It is measured in today's pesos of a present amount of P. b. PC a. FC c. F d. none of the aboveBuy On Time or Pay Cash Cost of Borrowing 1. 2. 3. 4. 5. 6. 7. 8. Cost of Paying Cash 9. 10. Terms of the loan a. Amount of the loan b. Length of the loan (in years) c. Monthly payment Total loan payments made ($ per month Less: Principal amount of the loan Total interest paid over life of loan Tax considerations: - Is this a home equity loan? - Do you itemize deductions on your federal tax return? What federal tax bracket are you in? Taxes saved due to interest deductions ($ %) Total after-tax interest cost on the loan X months) Annual interest earned on savings (6% X Annual after-tax interest earnings ($ %) X $10,000.00 5 $188.70 no yes 35% $ $ $ 00 00 $