You have recently invested in an office building located in NYC at a cost of $50 million.
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Question:
You have recently invested in an office building located in NYC at a cost of $50 million. You paid for 40% of the building in cash and financed 60% with an interest only loan. For a variety of reasons you decided to denominate the loan in British pounds. At the time of the loan origination $1 could buy 0.81 British pounds. If you have a clause within your loan stating that your loan-to-value must never exceed 70%, what conversion rate will trigger a default? For simplicity, assume that the value of your property does not change.
Related Book For
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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