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What are the appropriate loan rates for each firm

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Reference no: EM133112014

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 be required to pay prime + 2 percent. The current prime rate is 6.75 percent, the 30-year Treasury bond yield is 4.35 percent, the three-month Treasury bill yield is 3.54 percent, and the 10-year Treasury note yield is 4.22 percent. What are the appropriate loan rates for each firm?

Reference no: EM133112014

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