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please answer all of the questions :) 6 You enter into a $20 million Commercial Paper loan at 6% for one year. The lender will
please answer all of the questions :)
6 You enter into a $20 million Commercial Paper loan at 6% for one year. The lender will deduct interest before handing over proceeds. What is yield or effective rate? (interest / proceeds) 7 Market yields increase from 2.7% to 3.1%. How many basis points did the rate increase ? A 4 bps B 40 bps C 400 bps 8 You borrow $5000 for 270 days at 4% per annum. How much interest will you pay ? use 360 day/yr convention 9 You want to purchase ATT Preferred Stock that pays a $6.00 dividend. If similar Preferred shares are earning a 15% dividend yield, what would be the price you would pay for the ATT preferred shares ? Formula: Div / RRR 10 A stock pays a Dividend of $2.25 per share, the dividend is expected to grow 3% each year, and investors expect a 12% return on investment, what would be the price of the stock? Formula:Div/ (RRR- growth) 11 If the inflation premium used to determine the Required Rate of return increases, you can expect A Stock prices will decline B Bond prices will decline Preferred Stock will decline D All of the aboveStep by Step Solution
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