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What are the appropriate loan rates for each firm

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Question - Suppose two firms want to borrow money from a bank for a period of one year. Firm A has excellent credit, whereas Firm B's credit standing is such that it would pay prime + 3 percent. The current prime rate is 6.70 percent, the 30-year Treasury bond yield is 4.33 percent, the three-month Treasury bill yield is 3.58 percent, and the 10-year Treasury note yield is 4.20 percent. What are the appropriate loan rates for each firm?

Reference no: EM132963394

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