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  • 5 years ago

A reply and a question to ivan77 and anyone else. Thank you for your reply. The FTP pricing curve with the matched maturity approach is indeed the way that banks estimate the rates they charge to their clients. Although, I do not doubt it is the correct way instead of a WACC approach, at the same time I cannot see why the CoE for a bank should not enter in the calculation of transfer rates. After all, equity (existing and retained earnings) is a major source of funding the new investment in loans according to the regulatory requirements and is cost should be priced. Is this against the financ

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spraguer (Moderator)
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