Your company is planning to make an offer of $67 per share. You applied for low interest loans and will receive the followings:

a) 5-years loan of $3.8 million, zero interest

b) 35-years loan of $6 million, 3% interest,

while the normal borrowing rate is 6.6%. How much is the interest subsidy worth?

Select one:

a. 3.69

b. 2.69

c. 3.96

d. 2.96