Issue of commercial paper

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Lowell Corporation is considering the issue of commercial paper and would like to know the yield it should offer on its commercial paper. The corporation believes that a 0.1 percent default risk premium, a 0.2 percent liquidity premium, and a 0.2 percent tax adjustment are necessary to sell its commercial paper to investors. Furthermore, annualized T-bill rates are 7 percent. Based on this information, Vaughn should offer ____ percent on its commercial paper.

Reference no: EM132382908

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