Question
Suppose, $50M of the project s financing is in the form of a 4-year bank loan requiring annual interest payments and a repayment of the
Suppose, $50M of the project s financing is in the form of a 4-year bank loan requiring annual interest payments and a repayment of the principal at the maturity of the loan. Also suppose that the firm is paying a below market interest rate on the loan. Find the NPV of financing if the fair market interest rate on the loan is 10%, but the firm is paying only 8%. The tax rate is 40%
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International Finance Putting Theory Into Practice
Authors: Piet Sercu
1st edition
069113667X, 978-0691136677
