Clemson University Urgently needed $30 million to properly execute a student testing plan during fallof 2020. Clemson approached by a commercial paper dealer offering to sell an issue for Clemson. Thedealer indicates that Clemson could sell a $30 million issue maturing in 270 days at an interest rate of8.5 percent per annum (deducted in advance). The fee to the dealer for selling the issue would be 1.5%of the issue size. What was annual financing cost of Clemson to secure large-scale testing?O 10.42%O 11.42%O 12.42%O 13.42 %

Face value=$30 millionDiscount rate=8.5%Fees to broker=1.5%Number of days=270 days

Answered: Clemson University Urgently needed $30…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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