a-b

(Cost of commercial poper) Tri-State Enterprises plans to issue commercial paper for the first time in the firm's 35 -year history. The firm plans to issue $450,000 in 180 -day maturity notes. The paper will carry a 9.75 percent rate with discounted interest and will cost Tri- $ tate $14,000 (pald in advance) to issue. Note: Assume a 30 -day month and 360 -day year: a. What is the effective cost of credit to Tri-State? b. What other factors should the company consider in analyzing whether to issue the commercial paper? a. The effective cost of credit, or APR, to Tri-State is \%. (Round to two decimal places.)