Answered step by step
Verified Expert Solution
Question
1 Approved Answer
These questions go together, please help!! QUESTION 17 For the potential commercial paper issuance described above, what would the effective cost percent be? O a.
These questions go together, please help!!
QUESTION 17 For the potential commercial paper issuance described above, what would the effective cost percent be? O a. 1.88% O b.2.18% O c 1.69% O d. 1.68% You are an analyst in the Treasury department of Bennett Inc., a multinational firm. You have been tasked with answering questions the Treasurer has regarding short-term investing and short-term borrowing. Below are numbers that your assistant has researched for you to answer these questions. Discount rate on company's Commercial paper 1.00% Discount rate on money market securities for investing 3.00%) Dealers annual fee percent on commercial paper 0.15% Marginal tax rate 35% Yield on Municipal bonds 2.00% Short-term portfolio beginning of year value 250000.00 Short-term portfolio end of year value 257000.00 Line of Credit with the Bank 350,000.00 Interest Rate on bank lending 5% Commitment Fee percentage on line of credit 0.50%) Compensating Balance percentage on line of credit 10% QUESTION 15 For the potential commercial paper issuance described above, what would be the dollar amount of the commitment fee? O a $4,687.50 O b. $3,723.75 O c. $7,597.25 O d. $1,406.25 QUESTION 16 For the potential commercial paper issuance described above, what would be the dollar amount of the dealer fee? O a $9,375 O b.$1,406.25 O c. $4,687.50 O d. $1,704.75 QUESTION 17 For the potential commercial paper issuance described above, what would the effective cost percent be? O a. 1.88% O b.2.18% O c 1.69% O d. 1.68% You are an analyst in the Treasury department of Bennett Inc., a multinational firm. You have been tasked with answering questions the Treasurer has regarding short-term investing and short-term borrowing. Below are numbers that your assistant has researched for you to answer these questions. Discount rate on company's Commercial paper 1.00% Discount rate on money market securities for investing 3.00%) Dealers annual fee percent on commercial paper 0.15% Marginal tax rate 35% Yield on Municipal bonds 2.00% Short-term portfolio beginning of year value 250000.00 Short-term portfolio end of year value 257000.00 Line of Credit with the Bank 350,000.00 Interest Rate on bank lending 5% Commitment Fee percentage on line of credit 0.50%) Compensating Balance percentage on line of credit 10% QUESTION 15 For the potential commercial paper issuance described above, what would be the dollar amount of the commitment fee? O a $4,687.50 O b. $3,723.75 O c. $7,597.25 O d. $1,406.25 QUESTION 16 For the potential commercial paper issuance described above, what would be the dollar amount of the dealer fee? O a $9,375 O b.$1,406.25 O c. $4,687.50 O d. $1,704.75Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started