Question
Two firms each need $60 million in funds and go to the market for quotes. They are quoted: for G fixed: 3.6%; floating: BBSW plus
Two firms each need $60 million in funds and go to the market for quotes. They are quoted: for G fixed: 3.6%; floating: BBSW plus 1.8%; for H fixed: 2.4%; floating: BBSW plus 1.2%. If H accepts the fixed-rate funds and G the floating-rate funds, they both decide they can reduce their cost of funds through a swap. Structure a swap where G gets 40% of the gain and H gets 60% of the gain?
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
7th Edition
0357442040, 978-0357442043
