Problem 8.05 – Chrysler​ LLC
Multinational Business Finance
Eiteman, Stonehill, and Moffett
15th Edition
Determine the gain or loss on the interest rate futures.
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Determine the gain or loss on the interest rate futures.
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Given that the firm must pay float-rate interest and it wishes to lock in interest rate payments using interest rate futures, determine the gain or loss on the position at various possible floating interest rates.
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Determine the savings or costs for the swap given that LIBOR rises or falls by various basis points.
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Calculate the annual payment for a loan with a fixed maturity for a sovereign borrower, taking into account an amortizing structure. Consider the impact of negotiating for various interest rates given by international banks.
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Determine the loan payment on the six-year loan, and amortize the loan. Then, suppose the firm can extend the loan another two years by restructuring, determine the new loan payment and complete the amortization schedule.
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Calculate the cost of unwinding the swap some number of year(s) has passed, given the updated fixed interest rates and spot exchange rate for MedStat’s cross-currency swap.
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Determine the comparative advantage, the net interest after the swap, and the savings to both firms.
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Calculate the cash flows Ganado will receive and pay in each of three years along with the present values assuming they unwind the swap after one year.
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Given that the two firms wish to enter into a swap, determine the comparative advantage, the net interest, and the savings after the swap to both companies. Finally, determine which firm should borrow fixed and which should borrow floating.
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Determine the notional principal in SFr, and the amounts paid or received by Ganado for the first, second, and third years. If the firm unwinds the swap after one year, determine the present value of the cash flows, and the settlement of the unwinding.
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