How would the lessee in Figure evaluate the NPV of the lease? Sketch the correct valuation procedure.
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How would the lessee in Figure evaluate the NPV of the lease? Sketch the correct valuation procedure. Then suppose that the equity lessor wants to evaluate the lease. Again sketch the correctprocedure.
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Equity: Leasing firm puts up 20% of investment and gets depreciation and interest tax shields plus return of aircraft at end of lease if the lessee does not decide to purchase it. Tax shields Special-purpose entity buys 2090 Net lease aircraft and leases it to airline. Airline lessee 80% Debt: Lenders receive lease payments as debt service. Debt is nonrecourse but secured by lease payments and aircraft. Debt service Lease payments
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The value of the lease to the lessee is calculated as in Section 254 The lessee com...View the full answer
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Related Book For
Principles of Corporate Finance
ISBN: 978-0077404895
10th Edition
Authors: Richard A. Brealey, Stewart C. Myers, Franklin Allen
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