Question
The CEO wants your CRO opinion on the attractiveness of a large loan opportunity with a healthcare company benefiting from the current vaccination business. ?
The CEO wants your CRO opinion on the attractiveness of a large loan opportunity with a healthcare company benefiting from the current vaccination business. ?
The bank's threshold cost of capital is 10%. ?
he loan proposal is for an outstanding amount of $1,500m. Pricing is estimated at 1.20%, net of funding costs?The RWA risk-weight is assumed to be 65% of the exposure amount and the credit expected loss 1%. You may consider operating costs, tax charges, and any other elements to be immaterial.?
(a) Compute the RAROC of the deal and conclude whether it is accretive.?
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RAROC Revenues Costs Expected Losses Economic capital RAROC 120 1500000000 0 1...
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Management and Cost Accounting
Authors: Colin Drury
10th edition
1473748873, 9781473748910 , 1473748917, 978-1473748873
