Desert Trading Company has issued $100 million worth of long-term bonds at a fixed rate of 10%. The firm then enters into an interest rate
Desert Trading Company has issued $100 million worth of long-term bonds at a fixed rate of 10%. The firm then enters into an interest rate swap where it pays a LIBOR rate of 5% and receives a fixed 7% on notional principal of $100 million. What is the firms effective interest rate on its borrowing? (Round your answer to 1 decimal place.)
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Authors: George H. Pink, Paula H. Song
7th Edition
1640553177, 978-1640553170
