Question: Collingwood Corp s bank is willing to provide it with a
Collingwood Corp.’s bank is willing to provide it with a 10-year term loan for $50 million. The annual payments on this loan will be $5.25 million, and there is a “bullet” payment of $50 million at maturity. What is the interest rate being charged by the bank? Does it make sense that this loan would have a higher cost than the alternatives presented in Practice Problem 16?
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