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A company issues a five-year $100M variable rate bond with the following term structure: year1-6.25% year2-7.00% year3- 6.50% year4-7.25% year5-7.00% Calculate the swap rate (R)

A company issues a five-year $100M variable rate bond with the following term structure: year1-6.25% year2-7.00% year3- 6.50% year4-7.25% year5-7.00% Calculate the swap rate (R) and calculate the swap payments, payments to the bondholder who agreed to receive variable payments in lieu of swap payments.

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