DeAngelo Bank offers your firm a 9 percent discount interest loan for up to $20 million, and

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DeAngelo Bank offers your firm a 9 percent discount interest loan for up to $20 million, and in addition requires you to maintain a 4 percent compensating balance against the amount borrowed. What is the effective annual interest rate on this lending arrangement?
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Corporate Finance Core Principles and Applications

ISBN: 978-0077905200

3rd edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford

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