What is the loan rate on this bank loan

Assignment Help Finance Basics

Reference no: EM13265245

Vaspussen, Inc., is looking for a five-year term loan of $5 million. Its bank is willing to make the loan. The firm will have to pay a premium of 2.2 percent for default risk and another 0.95 percent for maturity risk. The current prime rate is 6.25 percent. What is the loan rate on this bank loan?

9.4%
3.2%
7.2%
8.5%

Reference no: EM13265245

Questions Cloud

What is the current price of bond m and bond n : Bond N also has a face value of $20,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 8 percent compounded semiannually.

Design finite state machine that uses information of player : Design a finite state machine that uses information about which player scores a point at each stage of a game to determine when a player wins and which player wins. Your design should include one reset input to initialize your win announcer

Explain nitrogen gas and carbon dioxide gas : How do you balance the equation for the oxidation of alanine to liquid water, nitrogen gas, and carbon dioxide gas

Calculate the amount of work required : Three charges are at the corners of an isosceles triangle, Calculate the amount of work required to assemble this system of charges, assuming they are brought in from infinity

What is the loan rate on this bank loan : Vaspussen, Inc., is looking for a five-year term loan of $5 million. Its bank is willing to make the loan. The firm will have to pay a premium of 2.2 percent for default risk and another 0.95 percent for maturity risk. The current prime rate is 6...

Compute the henry''s law constant of o2 : The solubility of O2 in water is 6.5 mg/L at an atmospheric pressure of 1.0 atm and temperature of 40 degrees C. Calculate the Henry's Law constant of O2 at 40 degree C. The mole fraction of O2 in air is .209

Determine the tension t which the upper man must exert : Two men are sliding a 100-kg crate up an incline. If the lower man pushes horizontally with a force of 500 N, and if the coefficient of static friction is 0.30, determine the tension T which the upper man must exert on the rope to get the crate to..

How long does the journey take according to the cosmic ray : A cosmic ray travels 60 km through the earth's atmosphere in 380?s, How long does the journey take according to the cosmic ray

Identify potential business environments : Compare and contrast benefits and challenges that exist between centralized database management systems and distributed database management systems. Identify potential business environments where each can be properly used.

User Account

All Pages