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Business, 15.04.2020 03:07 ella3714

Desert Trading Company has issued $100 million worth of long-term bonds at a fixed rate of 8%. The firm then enters into an interest rate swap where it pays a LIBOR rate of 5% and receives a fixed 6% on notional principal of $100 million. What is the firm’s effective interest rate on its borrowing?

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Desert Trading Company has issued $100 million worth of long-term bonds at a fixed rate of 8%. The f...
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