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Company X and Y offer below rates Company X Fixed Rate: 4.00% Floating rate: 3-month LIBOR + 25bp Company Y Fixed Rate: 5.00 % Floating

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Company X and Y offer below rates Company X Fixed Rate: 4.00% Floating rate: 3-month LIBOR + 25bp Company Y Fixed Rate: 5.00 % Floating rate: 3-month LIBOR +65 bp Assume Company X borrows at fixed rate and Y borrows at floating rate a) If they enter into a swap and the apparent benefits are shared, what is company Y's new effective borrowing rate?|

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