Question
Sweet Dreams Co. needs to borrow ${C} million for a factory equipment upgrade. Management decides to sell 10-year bonds. They determine that the 3-month Treasury
Sweet Dreams Co. needs to borrow ${C} million for a factory equipment upgrade. Management decides to sell 10-year bonds. They determine that the 3-month Treasury bill yields 3.52 percent, the firm's credit rating is AA, and the yield on 10-year Treasury bonds is 1.38 percent higher than that for 3-month bills. Right now, AA bonds are selling for 0.80 percent above the 10-year Treasury bond rate. What is the borrowing cost for this transaction?
Round the answer to two decimals.
Write % sign in the unites box.
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Funds Private Equity Hedge And All Core Structures
Authors: Matthew Hudson
1st Edition
1118790405, 978-1118790403
