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A treasury manager is examining the potential to issue commercial paper based on the following assumptions: Face Value = $25,000,000 Discount Rate = 0.75% Dealer
A treasury manager is examining the potential to issue commercial paper based on the following assumptions:
Face Value = $25,000,000
Discount Rate = 0.75%
Dealer Fee = 0.25%
Commitment Fee = 0.15%
Days to Maturity = 30
Based on these assumptions, what is the effective cost of the commercial paper?
A.1.17%
B.0.76%
C.0.75%
D.1.58%
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