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Your company is planning to make an offer of $67 per share. You applied for low interest loans and will receive the followings: a) 3-years
Your company is planning to make an offer of $67 per share. You applied for low interest loans and will receive the followings:
a) 3-years loan of $2.5 million, zero interest
b) 25-years loan of $4.5 million, 2.5% interest,
while the normal borrowing rate is 7%. How much is the interest subsidy worth?
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