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Suppose a rm takes out a 3 year loan with a face value of $1,000,000. The current oneyear risk free rate is 4.00%. You estimate that the variance of the rate of change of the firm's assets (the asset volatility) is 25.00% (note: when I say asset volatility, I mean sigma, not sigma squared). After the loan, the leverage ratio is 1. What is the value of the loan? (in dollars) C $886,736 C $693,968 C $848,183 C $771,075 What percent interest rate will the bank charge for this loan? C 7.37% C 9.54% C 8.67% A 9.97%