Abstract
De-Losso, et al.
(2013) should be credited as the first to show that, considering its cost of
capital, a financial institution may be better off if a single contract is
substituted by multiple contracts with their analysis focusing attention only
in the case of constant installments. De Faro (2022) expanded the analysis to
the case where the constant amortization scheme of debt amortization is the one
considered by the financial institution. In this paper the case of balloon
payments will be added to the constant amortization multiple contracts scheme.
