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Carter Enterprises can issue floating-rate debt at LIBOR + 2% or fixed-rate debt at 9%. Brence Manufacturing can issue floating-rate debt at LIBOR +
Carter Enterprises can issue floating-rate debt at LIBOR + 2% or fixed-rate debt at 9%. Brence Manufacturing can issue floating-rate debt at LIBOR + 2.9% or fixed-rate debt at 12%. Suppose Carter issues floating-rate debt and Brence issues fixed-rate debt. They are considering a swap in which Carter makes a fixed-rate payment of 7.95% to Brence and Brence makes a payment of LIBOR to Carter. What are the net payments of Carter and Brence if they engage in the swap? Round your answers to two decimal places. Use a minus sign to enter negative values, if any. Net payment of Carter: % Net payment of Brence: -(LIBOR + %) taff if it incived fixed rate debt or if it isciled floating-rate debt and engaged in the swan?
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