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vova2212 [387]
3 years ago
10

In 2005, a loan broker and appraiser working for a subsidiary of Bank of America appraised the Cassies home at a fair market val

ue of $620,000. Based on that appraisal and other representations by lending personnel, the Cassies elected to refinance their home with a $495,000 adjustable rate mortgage. Lending personnel told them their home would appreciate and they would be able to sell or refinance the home at a later date before having to make higher monthly loan payments. In 2010, the Cassies discovered their home was valued at $250,000. The monthly mortgage payments doubled in size. The Cassies stopped making payments on the mortgage, which had a balance due of $625,000. Soon after, the fair market value of the house was $200,000. Then, the bank foreclosed on the house and the Cassies moved in with family. The Cassies sued Bank of America for fraud. What is the result?
A. The Cassies will lose.
B. The Cassies will recover partial value of their foreclosed home.
C. The Cassies will win.
Business
1 answer:
Tomtit [17]3 years ago
3 0

Answer:

C. The Cassies will win.

Explanation:

In the given case, the cassies would win as this was appraisal fraud that done by the company employee who is a Bank of america Subsidiary. Here the loan broker and the appraiser increase the fair market value of cassies home i.e. $620,000 but it would be lesser that is $250,000. So this inflate the value in order to make the payment of high rate with related to the mortgage

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If survey questions are standardized and close-ended, they can produce data that is statistically comparable.
tino4ka555 [31]
Ur at a 50:50 chance of getting right. Just guess :p
6 0
3 years ago
Rick and Joe get together and start a mortgage brokerage business. They each contribute $25,000 of capital to the business. Afte
bezimeni [28]

Answer:

a.common stock.

Explanation:

The additional $10,000 of owners equity after listing on the stock market will be named as common stock. After listing company issues shares for capital investment in it. Common stock is the appropriate term used for every addition in the owners equity. So the correct option is a.common stock.

7 0
3 years ago
A firm is producing 24 units of output. At the 24th unit of output, marginal revenue is $5, and marginal cost is $4; at the 25th
agasfer [191]

Answer:

False.

Explanation:

(1) Units produced = 24 units of output

At the 24th unit of output,

Marginal revenue = $5

Marginal cost = $4

MR ≠ MC

At the 25th unit of output,

Marginal revenue = $4.50

Marginal cost = $4.50

MR = MC

At the 26th unit of output,

Marginal revenue = $4

Marginal cost = $5

MR ≠ MC

A firm maximizes its profit at a point where the marginal revenue is equal to the marginal cost i.e. MR = MC.

It is clear from the above scenario that this firm doesn't stop at 24 units of output because at this point of production profit maximizing condition is not fulfilled which means MR ≠ MC.

This firm should stopped at 25 units of output where marginal revenue is equal to the marginal cost from the 25th unit of output.

6 0
3 years ago
Ray Stokes is raising capital for a new company called NO Balloons Inc. NO Balloons will manufacture and sell festive balloons.
Sergeeva-Olga [200]

Answer:

NO Balloons' WACC = 7%

Explanation:

WACC = Weighted average cost of capital

The weighted average cost of capital (WACC) refers to calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All sources of capital, including <u>common stock</u>, <u>preferred stock</u>, <u>bonds</u>, and <u>any other long-term debt</u>, are included in a WACC calculation.

<u>Respective calculation of WACC:</u>

<u>Step 1: Calculate the value of equity:</u>

Number of shares = 12 million

Share price = $19.5 per share

Value of equity = 12 million shares * 19.5/share = $234 million  (A)

<u>Step 2: Calculate the value of debt: </u>

Bonds = 200,000

Value of debt = 200,000 bonds * 1000 face value/bond * 89% sale price = 178 million  (B)

<u>Step 3: Calculate the firm value:  </u>

Total firm value (A+B) = 234 + 178 = 412 million

<u>Step 4: Calculate the weight of equity: </u>

Dividing the value of equity to total firm value:

Weight of equity = 234 / 412 = 0.5680

<u>Step 5: Calculate the weight of debt: </u>

Dividing the value of debt to total firm value

Weight of debt = 178 / 412 = 0.4320

<u>Step 6: Calculation of WACC :</u>

WACC = weight of equity * cost of equity + weight of debt * cost of debt = 0.5680 * 9.275% + 0.4320 * 4% = 7%

7 0
3 years ago
Long Market Value: $48,000 Short Market Value: $18,000 Debit: $25,000 Credit: $25,000 SMA: $3,000 Interest charges on the accoun
padilas [110]

Answer:

C. $25,000

Explanation:

The interest charges on the account(margin) are based on the debit balance in the account. Also, credits that came as a result of short sales are usually not matched off against debits in the account, hence interest charges is based on the $25,000 debit balance.

6 0
3 years ago
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