Interest rates on bank loans exceed rates on commercial paper. Why don
QUESTION
Interest rates on bank loans exceed rates on commercial paper. Why dont all firms issue commercial paper rather than borrow from banks?
sible to issue commercial paper every 270 days since there are many fixed charges that the corporation has to pay. Hence these two securities are completely different. Term to maturity is very important for the firm. Hence the firm tries to determine the term needed and then borrow funds either using commercial paper ort bank loan.
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