What will be the market value of the equity for the FI? Assume that all of the

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What will be the market value of the equity for the FI? Assume that all of the NII in part

(a) is used to cover operating expenses or is distributed as dividends.

d. If market interest rates had decreased 100 basis points by the end of year 1, would the market value of equity be higher or lower than $1,000? Why?

e. What factors have caused the changes in operating per- formance and market value for this firm?

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