The department of Finance and International Business is happy to announce that Professor Li’s and Professor Ng’s research has been accepted for publication in the Journal of Finance Case Research.
Journal Article: To Pay Point or Not in Mortgage Finance: A Capital Budgeting Analysis
"Abstract: Despite the current era of historic low mortgage interest rate, paying points to lower the rate further in mortgage finance (refinance) has reemerged as a major choice option for home buyers (owners). This decision-making process parallels a typical problem in capital-budgeting analysis known as the mutually exclusive decision. We first use the mutually-exclusive binary decision to either finance without point payment or 1% point payment to conduct a capital budgeting base-case analysis using the various traditional capital-budgeting techniques. We next delve deeper into the decision-making process by conducting a sensitivity analysis on pairs of variables that have policy implications."
Congratulations Professor Li and Professor Ng!