MC – Advantages to Lessors Over Secured Loans
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Which is NOT an advantage to lessors over secured lenders when the lessee is under bankruptcy?
Which is NOT an advantage to lessors over secured lenders when the lessee is under bankruptcy?
Given the present value of buying equipment, the real discount rate, and zero inflation, determine the break-even after-tax yearly lease payment.
Your numbers will vary.
When insurance companies issue Cat bonds, who do they share their risks with?
Given the promised coupon, the principal amount the probability of default, and the payment under default, determine the expected payment from the bond.
Your numbers will vary.
When a firm sells an asset, in this case, an office building, but then leases the asset back in order to use it, this is called a what?
Determine the minimum acceptable lease payment for a lessor given that a computer will be depreciated straight-line to a zero salvage value. The problem assumes that the years over which the asset is depreciated is one less than the number of lease payments: for example 5 years of depreciation, but 6 lease payments.
Your numbers will vary.
What is the most important difference between a corporate bond and a Treasury bond issued by the U.S. Treasury?
Your firm will lease a magic box. You are given the cost of purchasing the box upfront, the lease payments, the borrowing rate, and the marginal tax rate, determine the NPV of the lease.
Your numbers will vary.
Given the lease payments for a new copier, the cost to buy it, and provided that it is depreciated straight line to a zero salvage, determine the NPV of the lease.
Your numbers will vary.
What does the seller of a forward contract agree to do?