Business Administration - Accounting & Financial Planning FIN401 Lecture Notes - Lecture 8: Commercial Paper, Eurocurrency, Promissory Note
20 Jan 2018
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A short-term unsecured promissory note in minimum units of. Sold (at a discount) by finance companies, other large. Total amount of commercial paper outstanding has increased corporations greatly in recent years. Used to finance inventory of finished goods in transit. Comparison of commercial paper rate to bank prime rate* Prob#6 cp: montreal brewers (mb) is going to issue million of 90 day commercial paper for net proceeds of million. Mb must maintain a mil credit line on which it must pay a standby fee of 0. 2 percent. Prob#7-ba: calculate the effective annual cost of issuing 270-day bas at a quoted rate of 6 percent with a face value of ,000,000. The bank charges a 0. 4 percent stamping fee. An increasing source of funds for canadian firms is the large. Loans from foreign banks denominated in u. s. dollars are. Foreign interest rates may be more favorable. The company then converts the borrowed foreign currency to canadian dollars.
