Problem 16. (5 points)

Maxim Sergeyevich works as a financial manager in a large industrial company. He has long dreamed of acquiring a large plot of land with a house on it. Maxim Sergeyevich saved money for a down payment on a mortgage for about two years, and finally, when a sufficient amount was in his account, he came across exactly the option he had been looking for. The bank manager, to whom Maxim Sergeyevich turned for a mortgage, offered a sufficient amount for the purchase of the house for 5 years at 12.5% per annum. In the evening, Maxim Sergeyevich's wife, Arina Anatolievna, told her husband that taking on debt was too risky, and their family, meanwhile, owned a large package of shares in the company where Maxim Sergeyevich works. The shares are preferred, and dividends are paid annually at a rate of 17%. The value of the share package is sufficient to fully cover the cost of the house, taking into account the existing savings and not going into debt. Maxim Sergeyevich disagreed with his wife. Who do you think is right in this situation: Maxim Sergeyevich or Arina Anatolievna?
# Answer: Maxim Sergeevich.

## Comment:

The return on the stock portfolio is higher than the interest payments on the loan, therefore, the loan will be a cheaper source of funds for buying a house compared to selling the stock portfolio.

#