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MetaDesert Trading Company has issued $ 1 0 0 million worth of long - term bonds at a fixed rate of 1 2 % .

MetaDesert Trading Company has issued $100 million worth of long-term bonds at a fixed rate of 12%. The firm then enters into an interest rate swap where it pays SOFR and receives a fixed 6.8% on notional principal of $100 million. What is the firms effective interest rate on its borrowing?

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