Question
Miami Systems has agreed to a syndicated eurocredit loan with the following terms: A revolving loan of $100,000,000 with an up-front fee of 2% of
Miami Systems has agreed to a syndicated eurocredit loan with the following terms: A revolving loan of $100,000,000 with an up-front fee of 2% of the principal and an interest rate of LIBOR plus 75 basis points. If the payments are made every six months and the current LIBOR rate is 5.00% for the first six months and 5.40%for the second six months, what is the effective annual cost of this loan?
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Focus On Personal Finance
Authors: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes, Melissa Hart
5th Edition
0077861744, 978-0077861742
