In exchange for a $400 million fixed commitment line of credit, your firm has agreed to do the following: Pay 1.92 percent per quarter on any funds…
In exchange for a $400 million fixed commitment line of credit, your firm has agreed to do the following: Pay 1.92 percent per quarter on any funds actually borrowed. Maintain a 1 percent compensating balance on any funds actually borrowed. Pay an up-front commitment fee of 0.27 percent of the amount of the line. Based on this information, answer the following: a. Ignoring the commitment […]
