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a Question 11 Not yet answered Marked out of 1.00 P Flag question K-Roo Ltd. can borrow at a floating rate of LIBOR + 2.135%
a Question 11 Not yet answered Marked out of 1.00 P Flag question K-Roo Ltd. can borrow at a floating rate of LIBOR + 2.135% or at a fixed rate of 6.71%, but prefers to take out a floating rate loan. Ala Co. can borrow at a floating rate of LIBOR + 0.915% or at a fixed rate of 6.1%, but prefers to take out a fixed rate loan. Suppose K-Roo Ltd. and Ala Co. enter into an interest rate swap agreement and decide to split the cost savings at a ratio of 80% (Ala) to 20% (K-Roo). At what rate can Ala Co. borrow for its fixed rate funds? arl a. 5.6120% O b. 5.7950% O c. 5.4900% d. 6.10%, Ala Co. should not enter into this swap with K-Roo Ltd. e. None of these options 20
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