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Assume FMC enters into a swap arrangement with Morgan Co. In the swap arrangement, FMC agrees to pay a fixed annual interest rate of 6%
Assume FMC enters into a swap arrangement with Morgan Co. In the swap arrangement, FMC agrees to pay a fixed annual interest rate of 6% in dollars and receive LIBOR plus 1.95% in euro every year for the next five years on a notional principal amount of euro 10million(or $15million at the current spot rate). Re-prepare a schedule that shows FMC'S cash payment in dollars to service this debt with the swap arrangement. Will FMC be better of with the swap?
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