Question
Ford has a 5 year $100m fixed rate loan with Citibank at 0.046 (annual rate). Ford now thinks rates will go lower and calls Goldman
Ford has a 5 year $100m fixed rate loan with Citibank at 0.046 (annual rate). Ford now thinks rates will go lower and calls Goldman Sachs for a swap and receives a quote of 0.029 / 0.030 (annual rate) against 6m LIBOR flat and executes the swap. Assume at the next rate reset, 6m LIBOR is 0.016 (annual rate). What is Ford's net effective annual interest rate for that rate reset in decimal terms to three decimal places?
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Lets break down the calculation step by step 1 Fixed Rate Loan with Citibank Loan Amount 100 million ...
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Modern Advanced Accounting in Canada
Authors: Hilton Murray, Herauf Darrell
8th edition
1259087557, 1057317623, 978-1259087554
