Question
A corporate treasurer plans to hedge some borrowing costs over the next five years by using an interest rate swap.The treasurer currently pays LIBOR plus
A corporate treasurer plans to hedge some borrowing costs over the next five years by using an interest rate swap.The treasurer currently pays LIBOR plus a 50 basis point spread on a revolving loan facility, where the size of the loan is $8,000,000.
Describe the cash flows that the corporate treasurer wants to pay and receive by using the swap.
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International Financial Management
Authors: Cheol Eun, Bruce G. Resnick
8th edition
125971778X, 978-1259717789
