Calculate the Total Fees a Firm Would Have to Pay

question 28

Multiple Choice

Calculate the total fees a firm would have to pay when its bank offers the firm the following loan commitment: A loan commitment of $7,500,000 with an up-front fee of 80 basis points and a back-end fee of 50 basis points. The take-down on the loan is 60 percent.

• A) $37,500
• B) $60,000
• C) $61,500
• D) $75,000

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Definitions:

CIA Operatives

Individuals working for the Central Intelligence Agency, often involved in covert operations, surveillance, and intelligence gathering internationally.

Joseph McCarthy

An American senator known for his 1950s campaigns to expose supposed communist infiltration in the U.S. government, leading to a period of widespread paranoia known as McCarthyism.

George Marshall

An American military leader, statesman, and diplomat who served as the Chief of Staff of the U.S. Army during World War II and later as Secretary of State, where he advocated for the European Recovery Program (also known as the Marshall Plan).

Communist

Pertaining to a political and economic ideology aiming for a classless society with collective ownership of production means, where goods and services are distributed based on need.