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A bank has $500 million in checking deposits with interest and noninterest costs of 6%, $250 million in savings and time deposits with interest and
A bank has $500 million in checking deposits with interest and noninterest costs of 6%, $250 million in savings and time deposits with interest and non-interest costs of 14%, and $250 million in equity capital with a cost of 25%. The bank has estimated that reserve requirements, deposit insurance fees and uncollected balances reduce the amount og money avaiable on checkign deposits by 15% and on savings and time deposits by 4%. What is the bank's before tax cost of funds?
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a. 14.65%
b.15.00%
c.15.74%
d. 13.29%
e. 12.75%
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