A company might hold a large amount of cash relative to noncash assets for which of the following reasons? Operating risks are high. Dividends are not typically paid to shareholders. Part of its operations includes low-tax foreign jurisdictions. All of the other answers represent reasons for large cash holdings.

Carey company is borrowing $225,000 for one year at 9.5 percent from second intrastate bank. the bank requires a 15 percent compensating balance. the principal refers to funds the firm can effectively utilize (amount borrowed − compensating balance). a. what is the effective rate of interest? (use a 360-day year. input your answer as a percent rounded to 2 decimal places.) b. what would the effective rate be if carey were required to make 12 equal monthly payments to retire the loan?