The European Union (EU) is a trade union of countries in Europe.
Answer:
The correct answer is b) The first tranche has the highest prepayment risk.
Explanation:
A collateralized mortgage obligation (CMO) is a type of security backed by mortgage. It is comprised of a pool of mortgages that are bundled together and sold as an investment. Prepayment risk is the risk of loss of interest income due to early repayment of the principal by the borrower.
In the given situation, there are three tranches. The first tranche has the highest prepayment risk because it is receiving principal at the earliest. Hence, there is more of a chance of this principal being returned early and the CMO holder losing out on potential interest. Therefore, the prepayment risk of the first tranche is the highest among all three tranches.
Answer:
The value of the levered firm is $917.35 million
Explanation:
To calcuate the value of the levered firm under the Miller Model, we have to use the following formula:
Value of levered firm (VL) = Value of unlevered firm(VU) + [1- { (1-Tc) * (1-Te) / (1-Td) } ] * Value of Debt (D)
= $850 million + [1 - { (1-0.34) * (1-0.25) / (1-0.30) } ] * $230 million
= $917.35 million. Value of levered firm (VL)
Answer:
$75,300
Explanation:
The computation of the balance in the land is shown below;
Purchase cost
$460,000
Add:
Demolition of existing building on site
$71,000
Add:
Legal and other fees to close escrow
$12,900
Less:
Proceeds from the sale of demolition scrap
($8,600)
Balance in the land
$75,300
Therefore, balance in the land account as of December 31, 2021 is $75,300
Current companies are able to achieve growth by different strategies that will allow them to create more opportunities. One of these strategies is to grow the business internally with the direct expansion or better yet create new business that will target another set of consumers.