(Answered) Bhp billiton and rio tinto have been offered the following

Finance

BHP Billiton and Rio Tinto have been offered the following rates on a $10 million 10-year investment. BHP Billiton have a fixed rate of 10.0% p.a. and floating rate of LIBOR, whereas Rio Tinto have a fixed rate of 10.5% p.a. and floating rate of LIBOR. BHP Billiton requires a fixed- rate investment while Rio Tinto requires a floating-rate investment. Design a swap that will net an investment bank, acting as intermediary, 0.2% per annum and will appear equally attractive for both companies.

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92875246
Price:- $10

Verified Expert

Priced at $20 Now at $10, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Basic Finance

We just signed a lease contract in a 200000 sf office

We just signed a lease contract in a 200,000 SF office building complex for $25/SF/year with rents paid in arrears (at the end of the year) annually. The rent will increase by 3% per year. The discount rate is 10%/year. ...

1 an analyst has modeled xyz stock using the fama amp

1.) An analyst has modeled XYZ stock using the Fama & French three factor model (FF3FM). Over the past few years the risk premium on SMB was 2.75% and the risk premium on HML was 3.50%. Regression analysis shows that XYZ ...

Suppose you want to raise 15m for a new machine you plan to

Suppose you want to raise $15m for a new machine. You plan to raise the funds by selling 20-year $1,000 bonds with a semi-annual coupon rate of 5% and 8% yield. Before putting the bonds to market, inflation drops half a ...

Discuss two types of costs amp two types of

Discuss two types of costs & two types of benefits(excluding tax shield and EPS) that would potentially arise from the leveraged recapitalization (a firm proposed a leveraged recapitalization which could create immediate ...

A client has identified two annuities that are available

A client has identified two annuities that are available for purchase, The first annuity pays $1,000 at the end of each month over a 3-year period at a nominal rate of 13% p.a. The second annuity pays $3,000 at the end o ...

Principals of financial markets group assignment -in groups

Principals of Financial Markets Group Assignment - In groups of 3-4, students should choose firstly an industry and secondly two (2) ASX listed companies in this same industry upon which to undertake a fundamental analys ...

The shareholders ofnbspa company need to elect six

The shareholders of a company need to elect six directors and there are 150,000 shares outstanding. 1). What is the minimum number of shares they need to own to make sure that they can elect at least one director if the ...

What choices does one have to make when deciding on health

What choices does one have to make when deciding on health care coverage options? What are consumer health care costs in today's market?

How to make sure that no patients information will be

How to make sure that no patient's information will be accessed without authorization during implementation of Electronic Health Records in a hospital. What are the steps to follow?

A firm recently paid a 044 annual dividend the dividend is

A firm recently paid a $0.44 annual dividend. The dividend is expected to increase by 10 percent in each of the next four years. In the fourth year, the stock price is expected to be $20. If the required return for this ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert