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Question
Gamma, Inc. plans to sell $1 million in 270-day-maturity commercial paper on which it will pay discounted interest at an annual rate of 12%. In addition, Gamma expects to incur a cost of $1,000 in dealer placement fees and other expenses to issue the paper. What is the effective cost of the paper to Gamma?A) 12.22%
B) 12.78%
C) 13.20%
D) 13.35%
Answer
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Related questions
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