2545 over 10 -year Treasuries, which currently yield 763%. Current 10 -year interest rate swaps are quoted at the LleOR versus the 78% fored rinte Managenterit beleves that the firm is currently "underrated and that its credit rating is likely to improve in the next year or bwo. Nevertheless, ine rnanagers are not comfortable with the ineerest rate risk associated with using short-teim debt. a. Suggest a strategy for borrowing the $95.1 million. What is your effective borrowng rate? b. Suppose the firm's credit rating does improve three years later it can now borrow at a spread of 0.50% over Treanunes, which now yeld 8 83ss for a seven-year matizity Aso, seven year interest rate swaps are quoled at LI8OR versus 962% How would you lock in your new credit quality for the next soven years? What is your etfective borrowng rate now? a. Suggest a strategy for borrowng the 595.1 million. What is your effective borrowing rate? (Select trom the drop-down menus.) Borrow 5951 milion short tertn and paying LIBOR+1.0\% Then enter a $951 minon notonal swip to receive LiBOR and pay b. Suppose the firri's credit rating does improve thee years fater. If can now borrow at a spread of 0.50% crer Treasunes, which now yeld 8 sees for a seven year maturity Also, seven-year interest fate swaps are quoted at LBOR versus 962%. How would you lock in your new credit qualify for the next seven years? What is you elfective borrowing rate now? (Seloct frem the drop-down menus) Refinance $P5.1 milion short-term loan with long-term loan at Urrwaid swap by entering new swap to pay LIDOR and recerver Elfectwe bortowing cost raw