Randall Corporation plans to borrow $266,000 for one year at 12 percent from the Waco State Bank. There is a 28 percent compensating balance requireme. Randall Corporation keeps minimum transaction balances of $20,000 in the normal course of business. This idle cash counts toward meeting the compensating balance requirement. What is the effective rate of interest? Note: Use a 360-day year. Input your answer as a percent rounded to 2 decimal places. Effective rate of interest

Randall Corporation plans to borrow $266,000 for one year at 12 percent from the Waco State Bank. There is a 28 percent compensating balance requireme. Randall Corporation keeps minimum transaction balances of $20,000 in the normal course of business. This idle cash counts toward meeting the compensating balance requirement. What is the effective rate of interest? Note: Use a 360-day year. Input your answer as a percent rounded to 2 decimal places. Effective rate of interest

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 19P

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