The Star Chemical Company wants to finance one of its production plants by borrowing $150 million for five years. Based on its moderate credit ratings, Star can borrow five-year funds at a 10.5% fixed rate or at a floating rate equal to LIBOR 75 bp. Given the choice of financing, Star prefers the fixed-rate loan. The Moon Development Company is also looking for five-year funding to finance its proposed $150 million office park development. Given its high credit rating, Moon can borrow the funds for 5 years at a fixed rate of 9.5% or at a floating rate equal to the LIBOR 25 bp. Given the choice, Moon prefers a variable-rate loan. In summary, Star and Moon have the following fixed and floating rate loan alternatives:
Company Fixed Rate Floating Rate
Star Company 10.50% LIBOR + 75 BP
Moon Company 9.50% LIBOR + 25 BP
Mood has Absolute advantage in Both Markets, while Star has as comparative advantage in the floating rate market. If a total of 0.50% savings have to be split equally between both;
Required:
What is the effective cost to Star & Moon after the interest rate swap assuming that the savings were split equally. Find both effective COSTS to each.
Answers: 2
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Which one of the following statements is true? ddt does not prevent disease from passing from agricultural animals to humans. cost was a major factor in the united states government's decision to ban ddt. many african governments concluded that the potential long-term health effects of ddt were not as serious as the immediate problem of insect control. ddt cannot accumulate in the fat of animals. the ddt ban in the united states has made it very difficult to control agricultural insect pests.
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Business, 22.06.2019 19:10, crzyemo865
Calculating and interpreting eps information wells fargo reports the following information in its 2015 form 10-k. in millions 2015 2014 wells fargo net income $24,005 $24,168 preferred stock dividends $1,535 $1,347 common stock dividends $7,400 $6,908 average common shares outstanding 5,136.5 5,237.2 diluted average common shares outstanding 5,209.8 5,324.4 determine wells fargo's basic eps for fiscal 2015 and for fiscal 2014. round answers to two decimal places.
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The Star Chemical Company wants to finance one of its production plants by borrowing $150 million fo...
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