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
Related questions
Question
Give typing answer with explanation and conclusion
Transcribed Image Text:Fill in the blank. If a company has three tranches of debt with the 1st tranche
amounting to $60m with an average interest rate of 5.25%, 2nd tranche amounting to
$40m with an average interest rate of 6.95%, and 3rd tranche amounting to $20m at an
average interest rate of 8.75%.
1
2
3
Debt Tranche
$60.0m
$40.0m
$20.0m
Avg. Interest Rate
5.25%
6.95%
8.75%
What is the weighted average interest rate? Round your answer to one decimal point
with no sign convention (no percentage sign needed).
Weighted Average Interest Rate = %
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