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Peter Peterson is evaluating three possible means of borrowing $1 million for one month: (1) Drawing down on a line of credit at 7.2% with
Peter Peterson is evaluating three possible means of borrowing $1 million for one month: (1) Drawing down on a line of credit at 7.2% with a 12% commitment fee on the full amount with compensating balances. (2) A banker's acceptance at 7.1% an all-inclusive rate. (3) Commercial paper at 6.9% with a dealer's commission of 14% and a backup line cost of 1/3%, both of these would be assessed on the $1 million of commercial paper issued. Which of these forms of borrowing results in the lowest cost of credit? Oa. Ob. Banker's Acceptance O'c. Commercial paper O d. Line of Credit and Commercial Paper has identical cost result O e. Banker's Acceptance and Commercial Paper has identical cost result Of. All three means of borrowing results the same cost of credit Line of Credit D
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