A company trying to determine if a commercial paper program may be a viable option for raising short-term funds. After discussions with the CP dealer
A company trying to determine if a commercial paper program may be a viable option for raising short-term funds. After discussions with the CP dealer and their bank, they have the following information:
Face Value of Issue: $235 Million
Discount Rate on Issue: 7.90% Annual Dealer Fee: 0.64%
Annual Credit Line Fee: 0.94%
Maturity on CP: 45 Days (rollover every 45 days)
Given this information, what is the effective annual rate on this issue?
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Authors: George H. Pink, Paula H. Song
7th Edition
1640553177, 978-1640553170
