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Posted on Jul 07, 2024

Craig's Crab Shack is receiving a mezzanine loan with the following terms: $5MM principal, 11% cash interest rate, 2% PIK, 5 year loan term, 0.5%

Craig's Crab Shack is receiving a mezzanine loan with the following terms: $5MM principal, 11% cash interest rate, 2% PIK, 5 year loan term, 0.5% commitment fee, and a 1% closing fee. What is the expected annual return to the lender?

A. 18.1%
B. 13.4%
C. 21.7%
D. 16.6%

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