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Estimated loan rate for the five-year bank loan

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Wildhorse needs to borrow $6 million for an upgrade to its headquarters and manufacturing facility. Management has decided to borrow using a five-year term loan from its existing commercial bank. The prime rate is 4 percent, and Wildhorse's current rating is prime + 2.55 percent. The yield on a five-year U.S. Treasury note is 1.92 percent, and the three-month U.S. Treasury bill rate is 0.11 percent. What is the estimated loan rate for the five-year bank loan?

Reference no: EM132413493

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