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please help if you know the correct answer Alpha and Beta Companies can borrow for a five-year term at the following rates: Alpha Beta Moody's
please help if you know the correct answer
Alpha and Beta Companies can borrow for a five-year term at the following rates: Alpha Beta Moody's credit rating Baa Fixed-rate borrowing cost 10.3% 12.5% Floating-rate borrowing cost LIBOR LIBOR + 1.0% If there is no swap bank involved, and Alpha wants to borrow through floating debts and desires 70% of the total benefit from the swap. How much could Alpha save from the swap? In other words, the all-in-cost for Alpha is LIBOR-B% through the swap, and B is worth 70% of the swap's total benefit (For example, if the total benefit of the swap is 2%, then B = 0.7 x 2%=1.4%, you enter your answer as "1.4") Step by Step Solution
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