Post a New Question

FINANCE

posted by .

Carborundum Metals issues commercial paper with a face value of $1,000,000 and a maturity of three months. Carborundum receives net proceeds of $992,000 when it sells the paper. If the prime rate is 8% APR compounded quarterly, how much savings in interest did Carborundum realize by accessing the commercial paper market?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. finance

    One yaer fom now, how much value creation is expected from the expansion?
  2. Finance

    A firm issues three-month commercial paper with $200,000 face value and receives $192,000. What is the EAR the firm is paying for these funds?
  3. Finance

    Carborundum Metals issues commercial paper with a face value of $1,000,000 and a maturity of three months. Carborundum receives net proceeds of $992,000 when it sells the paper. If the prime rate is 8% APR compounded quarterly, how …
  4. Finance

    calculate the annualized rate of return on a 200 day commercial paper. this loan does not pay periodic interest; it is a discount security. the face value of the paper is 1,000,000 and current market value is 980,000
  5. finance

    A manufacturing company issues a bond with a 100,000 face value and a coupon rate of 7%. If the bond has a life of 30 years, pays annual coupons, and the yield to maturity is 6.8%, what percentage of the bond's price is the present …
  6. Finance

    Suppose Preun Inc. issues $200 million in 60 day maturity commercial paper at a price of 99.35 par. (commercial paper is like a zero coupon bond. You buy it at a price of less than its par value and it pays the investor par value at …
  7. finance

    1. Yest Corporation's bonds have a 15-year maturity, a 7% semiannual coupon, and a par value of $1,000. The market interest rate (r) is 6%, based on semiannual compounding. What is the bond’s price?
  8. accounting and finance

    5. What are the proceeds If a company issues 10 year bonds with a face value of $10,000,000 in bonds with a coupon rate of 7% and a market rate of 7.5% paying interest payments semi annually. Will they sell at a premium or a discount?
  9. Finance

    Calculate the annualized rate of return on a 200-day commercial paper. This loan does not pay periodic interest; it is a discount security. The face value of the paper is $1 million and the current market value is $980,000.
  10. finance

    A General Power bond with a face value of $1,000 carries a coupon rate of 9.0%, has 9 years until maturity, and sells at a yield to maturity of 8.0%. (Assume annual interest payments.)

More Similar Questions

Post a New Question