Your company has sold a 8Y plain-vanilla swap on 1Y LIBOR precisely one year ago for a

Fantastic news! We've Found the answer you've been seeking!

Question:

Your company has sold a 8Y plain-vanilla swap on 1Y LIBOR precisely one year ago for a swap rate of 0.76%; as a consequence, you receive fixed and pay floating.

What value should your accounting system attribute to the swap today (notional principal: $140m)?

Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-0132148238

2nd edition

Authors: Berk, DeMarzo, Harford

See More Books

Posted Date: Apr 27, 2023 06:26 AM

See More Questions

You bought a stock one year ago for $50 per share and sold it today for $55 per share. It paid a $1 per share dividend today. What was your realized return?
You purchased a zero coupon bond one year ago for $109.83. The market interest rate is now 9 percent. If the bond had 25 years to maturity when you originally purchased it, what was your total return...
You bought one of Bergen Manufacturing Co.s 7 percent coupon bonds one year ago for $1,080.50. These bonds make annual payments and mature six years from now. Suppose you decide to sell your bonds...
Tim plays a computer game. Each game is a win or a loss. He wins three fifths of his first 40 games. He then wins his next 12 games. For all 52 games, Required: work out the ratio wins: losses Give...
Find H(jw) if its magnitude characteristic is shown infigure. IHI -20 dB/dec 40 dB -40 dB/dec -20 dB/dec 0.4 50 400 1000 w (rad's)
What is the potential energy developed in the elastic element of Short Problem 2.30 when a $300 \mathrm{~N}$ tensile force is applied? Data From Short Problem 2.30: When a tensile force of 300 N...
Find f0.01 for F12,8.
The following costs result from the production and sale of 12,000 CD sets manufactured by Gilmore Company for the year ended December 31, 2013. The CD sets sell for $ 18 each. The company has a 25%...
Barry has cash to invest and is considering purchasing ordinary shares in Hurst Ltd. The company just paid a dividend of $2.00 per share to its shareholders. The dividend is expected to grow at the...
In Integrative Case 10.1, we projected financial statements for Walmart Stores for Years +1 through +5. The data in Chapter 12, Exhibits 12.17 through 12.19 include the actual amounts for 2015 and...
Use the cosine of a sum and cosine of a difference identities to find cos (s+t) and cos (s-t). 5 3 sin s= and sint= 5 s and t in quadrant I 6 cos (s+t) = (Simplify your answer, including any...
1. What recent patent law changed the way patents are filed? Why was this done? 2. What are the problems with the current U.S.A. patent laws that relate to technology? 3. List 3 advantages that...
Question 3 The following ACF plots were produced for raw data of monthly sales of two different variables, A and B. a) Explain which variable (A or B) is likely to be easier to forecast. (2 marks)....
University Car Wash built a deluxe car wash across the street from campus. The new machines cost $231,000 including installation. The company estimates that the equipment will have a residual value...
Haru is a self-employed cash-method, calendar-year taxpayer, who made the following cash payments related to his business this year. Calculate the after-tax cost of each payment assuming Haru has a...
How does horizontal growth differ from vertical growth in a corporate strategy? 2. What are the advantages and disadvantages of an internal advantages growth strategy and an external growth strategy?...
If fixed costs are $250,000, the unit selling price is $125, and the unit variable costs are $73, what is the break-even sales (units)? a. 3,425 units b. 2,000 units c. 2,381 units d. 4,808 units
A routine activity such as pumping gasoline can be related to many of the concepts studied in this text. Suppose that premium unleaded costs $3.75 per gal. Work Exercises in order. Use the...
You have a portfolio with a standard deviation of 30% and an expected return of 18%. You are considering adding one of the two stocks in the table below. If after adding the stock you will have 20%...
Rumolt Motors has 30 million shares outstanding with a price of $15 per share. In addition, Rumolt has issued bonds with a total current market value of $150 million. Suppose Rumolts equity cost of...
Suppose Johnson & Johnson and the Walgreen Company have the expected returns and volatilities shown below, with a correlation of 22%. For a portfolio that is equally invested in Johnson & Johnsons...
The shareholders equity for Best in Show Cinemas L.td. (BSC) (adapted) at December 31. 2019 , appears as follows: On April 15, 2020, the market price of BSC common shares was $\$ 17$ per share....
Identify the effects--both the direction and the dollar amount-of the following assumed transactions on the total shareholders' equity of a large corporation. Each transaction is independent. a....
Solartech Inc. had the following sharcholders' equity at January 31 (dollars in millions): Assume that on March 7, Solartech split its common shares 2 for 1. Prepare the shareholders' equity section...

Your company has sold a 8Y plain-vanilla swap on 1Y LIBOR precisely one year ago for a

Question:

Expert Answer:

Pr esent Va lue of Fi xe d L eg ... View the full answer

Fundamentals of Corporate Finance

Students also viewed these accounting questions