Walters Manufacturing Company has been approached by a commercial paper dealer offering to sell an issue of commercial paper for the firm. The dealer indicates that Walters could sell a $5 million issue maturing in 182 days at an interest rate of 6 percent per annum (deducted in advance). The fee to the dealer for selling the issue would be $8,000.
Determine Walters' annual financing cost of this commercial paper financing.© BrainMass Inc. brainmass.com June 3, 2020, 9:34 pm ad1c9bdddf
If the interest charges are deducted from the full amount of the loan, Amount = ...
Walter's annual financing cost of commercial paper financing is determined.