Estimated loan rate for the five-year bank loan

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Crane needs to borrow $8 million for an upgrade to its headquarters and manufacturing facility. Management has decided to borrow using a five-year term loan from its existing commercial bank. The prime rate is 4 percent, and Crane's current rating is prime + 2.47 percent. The yield on a five-year U.S. Treasury note is 1.96 percent, and the three-month U.S. Treasury bill rate is 0.08 percent. What is the estimated loan rate for the five-year bank loan?

Reference no: EM132921596

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