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Homework answers / question archive / Sovereign Debt Negotiations
Sovereign Debt Negotiations. A sovereign borrower is considering a $100 million loan for a 4 year maturity It will be an amortizing loan, meaning that the interest and pnncipal payments will total annually to a constant amount over the maturity of the loan There is however a debate over the appropriate interest rate The borrower believes the appropriate rate for its current credit standing in the market today is 9% but a number of international banks with which it is negotiating are arguing that is most likely 14%, at the minimum 9% What impact do these different interest rates have on the prospective annual payments? The annual payment, if the interest rate was 9%, iss (Round to the nearest dollar) m m m DO
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