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12. You are given the following information: The table below describes the rates available for both Company A and Company B. 1 Company A Company
12. You are given the following information: The table below describes the rates available for both Company A and Company B. 1 Company A Company B Can borrow at a fixed rate of: 6.875% 5.375% Can borrow at a floating rate of: LIBOR + 1.65% SA L IBOR +0.90% Company A prefers a fixed interest rate. Company B prefers a floating interest rate. Company A and Company B can contact the other directly and create a swap, which benefits both companies equally. Calculate the resultant rate that Company A pays on its loan after the effect of the swap
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