If Analog Computers Can Borrow at 9

question 109

Multiple Choice

If Analog computers can borrow at 9.5% for 3 years,what is the annual rate of interest on an $800,000 loan where a 15% compensating balance is required?

• A) 11.18%.
• B) 17.27%.
• C) 9.50%.
• D) 3.16%.

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Definitions:

Dividend Payout Ratio

The fraction of net income a firm pays to its shareholders in dividends, typically expressed as a percentage.

Dividend Payout Ratio

A metric that shows what portion of a company's earnings are distributed to shareholders in the form of dividends, typically expressed as a percentage.

External Financing Needed

The amount of funding a company must seek from outside sources to finance its business operations and growth ambitions beyond what it can generate internally.

Internal Rate of Growth

The maximum rate of growth a firm can achieve without resorting to external financing, relying solely on its own resources.