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| Teaching Since: | May 2017 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
The Brandt Company has been approached by two different commercial paper dealers offering to sell an issue of commercial paper for the company. Dealer A offered to market an $8 million issue maturing in 90 days at an interest cost of 8.5 percent per annum (deducted in advance). The fee to Dealer A would be $12,000. Dealer B has offered to sell a $10 million issue maturing in 120 days at an interest rate of 8.75 percent per annum (deducted in advance). The fee to Dealer B would be $15,000. Assuming that Brandt wishes to minimize the annual financing cost of issuing commercial paper, which dealer should it choose?
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