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  3. cost of commercial paper commercial paper is usual

Cost of commercial paper Commercial paper is usually sold at a discount. Fan Corporation has...

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Finance

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Cost of commercial paper Commercial paper is usually sold at a discount. Fan Corporation has just soid an issue of 105-day commercial paper with a face value of $1.2 million. The firm has recelved initial proceeds of $1.188,776. (Vofo. Assume a 365 -day year) a. What effective annual rate will the firm pay for financing with commercial paper, assuming that it k rolled over every 105 days throughoue tho you? b. If a brokerage fee of $11.653 was paid from the initial proceeds to an investment banker for selling the lssoe, what effective antual rath wilh the fim pay assuming that the paper is rolled over every 105 days throughout the year? a. The effective annual rate the fim will pay for financing with commercial paper, assuming that it is roled over wivery 105 days throughoct the yaar, is (Round to two decimal places.)

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