Problem 4 Suppose that the three-month T-bill's annualized rate is 8% and Elizabeth Company plans to issue 90-day commercial paper. The federal tax status of commercial paper is the same as for Tbills. Income earned from investing in commercial paper is subject to state taxes, while income earned from investing in T-bills is not. The commercial paper has neither a callable nor convertible feature. Elizabeth Co. believes that a 0.7% default premium, a 0.2% liquidity premium, and a 0.3% tax adjustment are necessary to sell its commercial paper to investors. Calculate the before-tax yield of the commercial paper. Problem 4 Suppose that the three-month T-bill's annualized rate is 8% and Elizabeth Company plans to issue 90-day commercial paper. The federal tax status of commercial paper is the same as for Tbills. Income earned from investing in commercial paper is subject to state taxes, while income earned from investing in T-bills is not. The commercial paper has neither a callable nor convertible feature. Elizabeth Co. believes that a 0.7% default premium, a 0.2% liquidity premium, and a 0.3% tax adjustment are necessary to sell its commercial paper to investors. Calculate the before-tax yield of the commercial paper