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The Wonderful Bank is planning on raising $500 million in a new offering of commercial paper through its holding company. The plan on using $475

The Wonderful Bank is planning on raising $500 million in a new offering of commercial paper through its holding company. The plan on using $475 million of it to fund new loans. The current interest rate for similar commercial paper is 6.45 percent and it expects 0.25 percent in issuing costs. What is the effective rate of interest on this issue of commercial paper?

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