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§ High credit ratings fetch a lower cost of capital.

§ Wide range of maturity provide more flexibility.

§ It does not create any lien on asset of the company.

§ Tradability of Commercial Paper provides investors with exit options.

Disadvantages of commercial paper:

§ Its usage is limited to only blue chip companies.

§ Issuances of Commercial Paper bring down the bank credit limits.

§ A high degree of control is exercised on issue of Commercial Paper.

§ Stand-by credit may become necessary

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