Worthington, Inc. is planning to issue $7,500,000 in 120-day maturity notes carrying a rate of 11 percent per year. Worthington’s commercial paper will be placed at a cost of $35,000. What is the
effective cost of credit to Worthington?

Text: Foundations of Finance Author(s) Arthur J. Keown, John D. Martin, J. William Petty Publisher: Prentice Hall