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Question 3 Saddiq Inc. estimates that the firm has to supply inventories to its new store in Penang this year. The firm plans to sell
Question 3 Saddiq Inc. estimates that the firm has to supply inventories to its new store in Penang this year. The firm plans to sell RM5,000,000 , 270-day commercial paper on which the expected discounted interest is 5% per annum to finance the supplies. The company is expected to incur flotation cost of RM7,000. Estimate the effective cost of issuing the commercial paper. (Note: use 360 days per year) (3 marks) ii. Identify THREE (3) advantages of commercial paper
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