Solution
Answer-Sold at a discount from its par value
A commercial paper is an unsecured,short term debt instrument usually having a maturity period of less than 270 days.When a commercial paper is issued,it is issued at a discount to its par value and this discount usually reflects the market intrest rates prevaling at that time.
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which one is correct Commercial paper is O sold at a discount from its par value...
Need help solving this one. Thank you! Cost of commercial paper Commercial paper is usually sold at a discount. Fan Corporation has just sold an issue of 92-day commercial paper with a face value of $1.2 million. The firm has received initial proceeds of $1,176,121. (Note: Assume a 365-day year) What effective annual rate will the firm pay for financing with commercial paper, assuming that it is rolled over every 92 days throughout the year? b. If a brokerage fee...
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