1 the availability of bank credit often is more important, Ask an Expert

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1. The availability of bank credit often is more important to a small firm than to a large one. Why?

2. What kinds of firms use commercial paper? Could Mama and Papa Gus's Corner Grocery borrow using this form of credit?

3. Suppose a firm can obtain funds by borrowing at the prime rate or by selling commercial paper.

a. If the prime rate is 51/2 percent, what is a reasonable estimate for the cost of commercial paper?

b. If a substantial cost differential exists, why might a firm like this one actually borrow some of its funds in each market?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92229672

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