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 ...

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What is the effective annual cost if a firm issues $2.5 million face value of 90-day commercial

Question:

What is the effective annual cost if a firm issues $2.5 million 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
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...