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borteleto borteleto
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6 years ago
The Missouri River Pendant Company uses commercial paper to satisfy part of its short-term financing requirements. Next week, it intends to sell $18 million in 90-day maturity paper on which it expects to have to pay discounted interest at an annual rate of 7 percent per annum. In addition, Stoney River expects to incur a cost of approximately $25,000 in dealer placement fees and other expenses of issuing the paper. What is the effective annual cost of credit to Missouri River?
A) 7.7%
B) 7.5%
C) 7.3%
D) 7.1%
Textbook 
Foundations of Finance

Foundations of Finance


Edition: 9th
Authors:
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DeanaRayDeanaRay
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borteleto Author
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