What is the effective interest rate on the loan

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Reference no: EM131990079

1. Holland Construction Co. has an outstanding 180-day bank loan of $397,000 at an annual interest rate of 9.7%. The company is required to maintain a 18% compensating balance in its checking account. What is the effective interest rate on the loan? Assume the company would not normally maintain this average amount.

10.83%

14.83%

13.83%

11.83%

2. An issue of common stock's most recent dividend is $4.55. Its growth rate is 4.0%. What is its price if the market's rate of return is 8.0%

$118.75

$118.30

$56.88

$123.75

Reference no: EM131990079

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