Question: Calculate the effective borrowing cost for a CP issue with the following specs: 1) $7,500,000 face value 2) 45-day maturity 3) 1 percent discount rate

Calculate the effective borrowing cost for a CP issue with the following specs:

1) $7,500,000 face value 2) 45-day maturity 3) 1 percent discount rate 4) Dealer fees of 0.15 percent 5) Commitment fee of 0.50 percent for $7,500,000 unused line of credit availability

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