1. MPRIME as of 08/2013 was 3.25%
APR for National First = 3.25% + 6.75% = 10%
APR for Regions Best 13.17%
EAR for National First [(1 = ((10%)/2)) 2-1 = 10.25%
EAR for Regions Best [(1 = ((13.17%)/12)) 12-1 = 13.9947%
1. Based on the information about I would choose National First because of the lower EAR rate of 10.25% and also because the EAR is compounded semiannually making the EAR even lower over Regions Best who had a higher EAR at 13.9947% and compounds the EAR monthly. Based on all of this information I would have to say that National First is the better choice.
2. Loan Amount 6,950,000 …show more content…
Based on this new information and the lower rate of 8.6% APR from Regions Best I would agree with the decision to use Regions Best for this loan, even though the rate compounds monthly the rate is still lower than National First at 10.25% and was a better choice.
Task 2: Evaluating Competitor’s Stock
1. Company Name: Raytheon
Stock Price: $80.69
Dividend per Share: $2.20
Dividend Yield: 2.80%
Required Rate of Return ($2.20 / 80.69) + 5% =