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Question
Quincy Fathows & Co. plans to issue commercial paper for the first time in its 85-year history. The firm plans to issue $400,000 in 120-day maturity notes. The paper will carry a 13% quarterly compounded rate with discounted interest and will cost Quincy Fathows $8,000 in advance to issue.a. What is the effective cost of credit to Quincy Fathows?
b. What other factors should the firm consider in analyzing whether or not to issue the commercial paper?
Answer
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Related questions
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