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Alps Ltd wants to borrow on a 5-year term from its bank. The lender determines that the company should pay a default risk premium of
Alps Ltd wants to borrow on a 5-year term from its bank. The lender determines that the company should pay a default risk premium of 1.75 per cent over the Treasury rate. The five-year Treasury rate is currently 5.65 per cent. The company also faces a marketability risk premium of 0.80 per cent. What is the total borrowing cost to the company? with full steps
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