onelife1

cpk123 Wrote:
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> FV=-1
> I/Y=Int Rate/12
> N=Time period in Months
>
> Find PMT
>
> That is the rate per month
>
> Now that * 12 + the Int rate = Band of investment
> Mortgage rate
>
> now do a WACC Calculation:
> with % of equity investment and the above as the %
> of the Bond investment.
>
> e.g. 20 year mortgage paying 6%, 35% debt
> financed, 65% equity financed at 12%
>
> N=240, FV=-1, I/Y=6/12=0.5,
> PMT=?
>
> PMT=0.002164
>
> PMT*12 = 0.02597 = 2.6%
> total debt rate = 6+2.6 = 8.6%
>
> 0.35*8.6 + 0.65 * 12 = 10.8% --> Band of
> Investment rate.

cpk - if the loan makes annual payments, we do not have divide the I/Y by 12 and the N should be keyed in as the number of years correct?