30. Suppose that a bank does the following: a Sets a loan rate on a prospective loan at 6.8 percent. b. Charges a 1/10 percent (10 basis points) loan origination fee to the borrower. c. Imposes a 3 percent compensating balance requirement to be held as non-interest-bearing demand deposits. d. Holds reserve requirements of 10 percent imposed by the Federal Reserve on the bank's demand deposits. What is the gross return to the loan for the bank? A) 7.09% B) 6.9% C) 7.68% D) 8.48% E) 10% 36. Retro Gym has three creditors: a bank with seniority in the amount of $350, Senior Bondholders in the amount of $190, and a steel trade creditor with no priority in the amount of $40. Retro Gym has proposed the following two debt restructuring plans. How much does the Bank prefer its preferred plan to its less preferred plan? / And is there a creditor coordination problem? Plan A: 50% chance the value of the firm =$690 50% chance the value of the firm = $90 Plan B: 30% chance of the value of the firm = $410 70% chance the value of the firm = $135 A) $220; yes B) $220; no C) $20.50; yes D) $20.50; no E) $200; yes 30. Suppose that a bank does the following: a Sets a loan rate on a prospective loan at 6.8 percent. b. Charges a 1/10 percent (10 basis points) loan origination fee to the borrower. c. Imposes a 3 percent compensating balance requirement to be held as non-interest-bearing demand deposits. d. Holds reserve requirements of 10 percent imposed by the Federal Reserve on the bank's demand deposits. What is the gross return to the loan for the bank? A) 7.09% B) 6.9% C) 7.68% D) 8.48% E) 10% 36. Retro Gym has three creditors: a bank with seniority in the amount of $350, Senior Bondholders in the amount of $190, and a steel trade creditor with no priority in the amount of $40. Retro Gym has proposed the following two debt restructuring plans. How much does the Bank prefer its preferred plan to its less preferred plan? / And is there a creditor coordination problem? Plan A: 50% chance the value of the firm =$690 50% chance the value of the firm = $90 Plan B: 30% chance of the value of the firm = $410 70% chance the value of the firm = $135 A) $220; yes B) $220; no C) $20.50; yes D) $20.50; no E) $200; yes