Union pacific is considering issuing commercial paper and


Union Pacific is considering issuing commercial paper and would like to know the yield it should offer. The corporation believes that a 0.2 percent default risk premium, a 0.1 percent liquidity premium, and a 0.3 percent tax adjustment are necessary to sell its commercial paper to investors. Furthermore, annualized T-bill rates are 6.2 percent. Based on this information, Union Pacific should offer _______ percent on its commercial paper.

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Financial Management: Union pacific is considering issuing commercial paper and
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