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Mustika Bhd has a revolving credit agreement with AGS Bank under which it can borrow up to RM15 million. The company must maintain a 10%
Mustika Bhd has a revolving credit agreement with AGS Bank under which it can borrow up to RM15 million. The company must maintain a 10% compensating balance on outstanding loans. Interest on the borrowed funds is 15% and the commitment fee is 1.5% on the unused portion of the credit line. Find the effective interest rate for Mustika Bhd if the amount borrowed is:
RM3 million
RM15 million
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Financial Management Principles And Applications
Authors: Sheridan Titman
9th Edition
0655705457, 9780655705451
