Question: Short Answer Question 2: Company C has a $50M line of credit with a 5% compensating balance. The firm has outstanding borrowings of $37M. The

Short Answer Question 2:

Company C has a $50M line of credit with a 5% compensating balance. The firm has outstanding borrowings of $37M. The fee on the unused portion of the line of credit is 0.25% and the interest rate on the borrowings is LIBOR of 0.28% plus 3.25%. What is the annual interest rate for the line of credit?

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