What is the bank effective cost of borrowing

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A bank is going to issue $10,000,000 in 5-year par value bonds that pay a 5% annual coupon. The bank must pay .7% of the face value in floatation costs. What is the bank's effective cost of borrowing?

Reference no: EM131351395

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What is the bank effective cost of borrowing : A bank is going to issue $10,000,000 in 5-year par value bonds that pay a 5% annual coupon. The bank must pay .7% of the face value in floatation costs. What is the bank's effective cost of borrowing?

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