The weighted average coupon (WAC) rate would be 8.85%.
What is the weighted average coupon (WAC) rate?
- The total amount of interest paid on all debt is the weighted average interest rate.
- By adding up all interest payments made throughout the measurement period and dividing by the entire amount of debt, this percentage is calculated.
- To determine the WAC each mortgage or MBS's remaining principal balance is multiplied by the coupon rate.
Average% = (10*0.5 + 9* 0.45 + 8 * 0.75)/1.7
= 8.85%.
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