Calculating Fees on a Loan Commitment Calculate the Total Fees

question 41

Multiple Choice

Calculating Fees on a Loan Commitment Calculate the total fees a firm would have to pay when its bank offers the firm the following loan commitment: A loan commitment of $5,000,000 with an up-front fee of 50 basis points and a back-end fee of 20 basis points.The take-down on the loan is 80 percent.

• A)$10,000
• B)$25,000
• C)$27,000
• D)$33,000

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Definitions:

Atherosclerosis

The buildup of fatty deposits (plaque) on the lining of arteries.

Arteries

Blood vessels that carry oxygenated blood away from the heart to the rest of the body.

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A disease characterized by the accumulation of amyloid proteins in various tissues of the body, potentially leading to organ dysfunction.

Leukemia

A type of cancer that affects the blood and bone marrow, characterized by the overproduction of abnormal white blood cells.