What is the loan rate charged by american pharoah

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Question - American Pharoah management is planning to make a $2.0 million loan to a French firm. Currently, LIBOR is at 1.5 percent. American management considers a default risk premium of 1.30 percent, a foreign exchange rate risk premium of 0.20 percent, and a country risk premium of 0.13 percent to be appropriate for this loan. What is the loan rate charged by American Pharoah?

Reference no: EM133189081

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