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Yosemite Corporation has a n outstanding debt o f $ 1 0 . 0 3 million o n which i t pays a 5 percent
Yosemite Corporation has outstanding debt $ million which pays percent fixed interest rate annually. Yosemite just made its annual interest payment and has three years remaining until maturity. Yosemite believes that interest rates will fall over the next three years and that floatingrate debt will allow reduce its overall borrowing costs. A bank offers Yosemite a threeyear interest rate swap with annual payments which Yosemite will pay LIBOR, currently percent, and receive percent fixed rate $ million notional principal. Suppose that LIBOR turns out percent one year and percent two years. Including interest payments Yosemite outstanding debt and payments the swap, what will Yosemite net interest payments for the next three years?
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