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Desert Trading Company has issued $ 100 million worth of long-term bonds at par at a fixed rate of 7%. The firm then enters into

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Desert Trading Company has issued $ 100 million worth of long-term bonds at par at a fixed rate of 7%. The firm then enters into an interest rate swap where it pays LIBOR and receives a fixed 6% on notional principal of $ 100 million. What is the firm's effective interest rate on its borrowing? (@LO 17-5)

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