Question
A large firm received a loan guarantee from the government. Due to the guarantee, the firm can borrow $50 million for five years at 10
A large firm received a loan guarantee from the government. Due to the guarantee, the firm can borrow $50 million for five years at 10 percent interest rate per year instead of 12 percent per year. Calculate the value of the guarantee to the firm. (Ignore taxes.)
Multiple Choice
$3.80 million
+$53.60 million
+$3.60 million
$3.60 million
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Finance Capital Markets Financial Management And Investment Management
Authors: Frank J. Fabozzi, Pamela Peterson Drake
1st Edition
0470407352, 978-0470407356
