The commercial paper will be backed by a line of credit


Garth Services is going to issue $10,000,000 of commercial paper at a price of 9,500,000. The issuing costs are $10,000. In addition, the commercial paper will be backed by a line of credit that has a commitment fee of one-half of 1 percent a year. If the issue is for 270 days and Gareth's tax rate is 35% then find: a. Loan Amount b. Interest c. Compensating balance d. Other fees e. EAR Only info available.

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Financial Management: The commercial paper will be backed by a line of credit
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