Question
Calculate the new value of CET1, Tier I, and total capital ratios for the following transactions. a. The bank repurchases $101,000 of common stock with
Calculate the new value of CET1, Tier I, and total capital ratios for the following transactions.
a.The bank repurchases $101,000 of common stock with cash. (Round your answers to 2 decimal places. (e.g., 32.16))
CET1 ratio%Tier I ratio%Total capital ratio%b.The bank issues $2.1 million of CDs and uses the proceeds to issue category 1 mortgage loans with a loan-to-value ratio of 70 percent. (Round your answers to 2 decimal places. (e.g., 32.16))
CET1 ratio%Tier I ratio%Total capital ratio%c.The bank receives $501,000 in deposits and invests them in T-bills. (Round your answers to 2 decimal places. (e.g., 32.16))
CET1 ratio%Tier I ratio%Total capital ratio%d.The bank issues $801,000 in common stock and lends it to help finance a new shopping mall. The developer has an A+ credit rating. (Round your answers to 2 decimal places. (e.g., 32.16))
CET1 ratio%Tier I ratio%Total capital ratio%e.The bank issues $1.1 million in nonqualifying perpetual preferred stock and purchases general obligation municipal bonds. (Round your answers to 2 decimal places. (e.g., 32.16))
CET1 ratio%Tier I ratio%Total capital ratio%f.Homeowners pay back $4.1 million of mortgages with loan-to-value ratios of 50 percent and the bank uses the proceeds to build new ATMs. (Round your answers to 2 decimal places. (e.g., 32.16))
CET1 ratio%Tier I ratio%Total capital ratio%
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