Calculate the effective interest rate for the following financing: 1) Platinum Group wants to raise RM10...
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Calculate the effective interest rate for the following financing: 1) Platinum Group wants to raise RM10 million additional fund through commercial papers that mature in 120 days at an interest rate of 9% annually and incurring total replacement fees of RM30,000. 1) Global Network is negotiating on a 9-month revolving credit agreement with Bank YY for RM700,000 at a stated interest rate of 8% annually. The bank requires a 2% commitment fee on the unused fund and a compensating balance of RM60,000. Currently Global Network had a RM50,000 checking account balance that can be used to meet part of the compensating balance requirement. Assume Global Network only uses RM500,000 worth of loan. 1) Wajib Juta Bhd is trying to determine the cost of a 7-month RM400,000 loan from Bank XX. Interest rate to be charged is 7%, on a discount basis and requires 5% compensating balance. Calculate the effective interest rate for the following financing: 1) Platinum Group wants to raise RM10 million additional fund through commercial papers that mature in 120 days at an interest rate of 9% annually and incurring total replacement fees of RM30,000. 1) Global Network is negotiating on a 9-month revolving credit agreement with Bank YY for RM700,000 at a stated interest rate of 8% annually. The bank requires a 2% commitment fee on the unused fund and a compensating balance of RM60,000. Currently Global Network had a RM50,000 checking account balance that can be used to meet part of the compensating balance requirement. Assume Global Network only uses RM500,000 worth of loan. 1) Wajib Juta Bhd is trying to determine the cost of a 7-month RM400,000 loan from Bank XX. Interest rate to be charged is 7%, on a discount basis and requires 5% compensating balance.
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Related Book For
Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
Posted Date:
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