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10 A corporation has issued a $6 milion issue of floating rate bonds on which pays an interest rate 10% over the USOR rate. The
10
A corporation has issued a $6 milion issue of floating rate bonds on which pays an interest rate 10% over the USOR rate. The bonds are selling at par value. The firm is worried that rates are about to rise, and it would like to lock in a fixed interest rate on its borrowings. The firm sees that dealers in the swag market are offering Swaps of LIBOR for 5%. A swap arrangement converts the firm's borrowings to a synthetic foredrate loan What interest rate will pay on that synthetic foredraleloan (Round your answer to 1 decimal place) Interest rate Step by Step Solution
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