6. Using interest rate swaps and hedging interest payments Consider two firms: Jackson Co, and Goff Co. Both firms plan to issue bonds. Jackson is a highly rated firm that is seeking to issue a floating-rate bond, as it expects interest rates to decrease with. time. Goff is a low-rated firm that prefers to issue a bond with a fixed-rate. The rates for each company, for each type of bond, are summarized in the following table First, suppose that Jackson Co, issues a fixed-rate bonds at 8.00\%, and Goff issues floating-rate bonds at LIBOR + 1,00\%. Then, suppose these two companies engage in an interest rate swap, in which dackson provides variable rate payments to Goff of LIBOR +0,50%. In exchange, Goff makes: fixed-rate payments of 8,50%. Relative to what it pays to its bondholders for its fixed-rate bonds, Jackson gains per year in financing cost savings. Relative to what it pays to its bondholders for its flouting-rate bonds, Goff gains financing cost savings. Both firms plan to Issue bonds. Jackson is a highly rated firm that is seeking to issue a floating-rate bond, as it expects interest rates to decrease with time. Goff is a low-rated firm that prefers to issue a bond with a fixed-rate. The rates for each company, for each type of bond, are summarized in the following table First, suppose that Jackson Co. issues a fixed-rate bonds at 8.00%, and Goff issug 1.50%-rate bonds at LIBOR +1.00%. Then, suppose these two companies engage in an interest rate swap, in which Jackson provides variable rad 1.00% ts to Golf of LiP0R + 0.50%. In exchange, Goff makes Relative to what it pays to its bondholders for its fixed-rate bonds, Jackson gains per year in financing cost savings. Relative to what it pays to its bondholders for its floating-rate bonds, Goff gains financing cost savings. Consider two firms: Jackson Co. and Goff Co. Both firms plan to issue bonds. Jackson is a highly rated firm that is seeking to issue a floating-rate bond, as it expects interest rates to decrease with time. Goff is a low-rated firm that prefers to issue a bond with a fixed-rate. The rates for each company, for each type of bond, are summarized in the following table pays to its bondholders for its floating-rate bonds, Golf gains financing cost savings