Question:

Determine Walters's annual financing cost of this commercial paper financing. (PLEASE HELP)?

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Walters Manufacturing Company has been approached by a commercial paper dealer offering to sell an issue of commercial paper for the firm. The dealer indicates that Walters could sell a $5 million issue maturing in 182 days at an interest rate of 6% per annum (deducted in advance). The fee to the dealer for selling the issue would be $8,000. Determine Walter's annual financing cost of this commercial paper financing. Can someone please show me how to figure this; I would greatly appreciate it. THANKS!!!!

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  1. 1. interest=5 milyun $*6%*(0.5 yeer)=3%* 5 mil=150,000$

    add in the 8,000$ fee

    2. sumwon mite get pikky & sae 182 daes/365=0.49863 yeer.

    3. wot  cha meen bi "annual financing kost"?

    just triing tu muddy the water?

    tri tu impli him roll over the debt so gotta pae interest for 1 yeer?

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