Question
The Gold Company is applying for a five-year term loan from its bank. The lender determines that the firm should pay a default risk premium
The Gold Company is applying for a five-year term loan from its bank. The lender determines that the firm should pay a default risk premium of 1.75 percent over the Treasury rate. The five-year Treasury rate is currently 5.65 percent. The firm must also pay a marketability risk premium of 0.80 percent. What is the total borrowing cost to the firm?
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Lending Investments And The Financial Crisis
Authors: Elena Beccalli, Federica Poli
1st Edition
1349564982, 978-1349564989
