Will the company''s borrowing cost increase, decrease

Reference no: EM13154101

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. The firm's credit standing is prime + 2 percent. The current prime rate is 6.80 percent, the three-month Treasury bond yield is 4.43 percent, the three-month Treasury bill yield is 3.49 percent, and the 10-year Treasury note yield is 4.25 percent. Now suppose that Firm B decides to get a term loan for 10 years. What is the loan rate for the fir

Reference no: EM13154101

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