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Suppose a firm takes out a 4 year loan with a face value of $3,000,000. The current one-year risk free rate is 4.5%. You estimate

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Suppose a firm takes out a 4 year loan with a face value of $3,000,000. The current one-year risk free rate is 4.5%. You estimate that the variance of the rate of change of the firm's assets (the asset volatility) is 19.00% (note: when I say asset volatility, I mean sigma, not sigma squared). After the loan, the leverage ratio is 1.000. What is the value of the loan? (in dollars) $2,447,439 O $2.341,029 O $1,915,387 $2,128,208 What percent interest rate will the bank charge for this loan? 9.8796 8.58% 7.29% 9.4496

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