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Instead of using gap analysis, Spring Company could use an interest-rate swap. The following data is available for Spring Company and a potential swap party
Instead of using gap analysis, Spring Company could use an interest-rate swap. The following data is available for Spring Company and a potential swap party (SP) who is willing to take on floating-rate financing. Calculate the effective interest rate that Spring Company would pay on its financing as a result of the swap. Also calculate the effective interest rate that SP would pay on its financing as a result of the swap
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