Question: What is the effective annual cost if a firm issues
What is the effective annual cost if a firm issues $2.5 million face value of 90-day commercial paper for net proceeds of $2,450,000? The firm pays a standby fee of 0.05 percent on the face value.
Answer to relevant QuestionsDescribe the causes of a “credit crunch.”List the four areas of conflict of interest between shareholders and managers.State the statutory responsibilities of directors that are described in the Canada Business Corporations Act.Calculate the effective annual cost of issuing 270-day BAs at a quoted rate of 6 percent with a face value of $10 million. The bank charges a 0.4 percent stamping fee.State four main motives firms have to hold cash.
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