A bank has DA = 2.4 years and DL= 0.9 years. The bank has total equity of $82 million and total assets of $850 million. Interest rates are at 6 percent. If interest rates increase 1%, the predicted dollar change in equity value will equal O $10,171,698 -$10,171,698 O $12,724,528 O-$12,724,528 O $4,928,756

A bank has DA = 2.4 years and DL= 0.9 years. The bank has total equity of $82 million and total assets of $850 million. Interest rates are at 6 percent. If interest rates increase 1%, the predicted dollar change in equity value will equal O $10,171,698 -$10,171,698 O $12,724,528 O-$12,724,528 O $4,928,756

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter9: The Cost Of Capital

Section: Chapter Questions

Problem 16P

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