Question: Desert Trading Company has issued 100 million worth of

Desert Trading Company has issued $ 100 million worth of long- term bonds at a fixed rate of 7 percent. The firm then enters into an interest rate swap where it pays LIBOR and receives a fixed 6 percent on notional principal of $ 100 million. What is the firm’s overall cost of funds?

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  • CreatedJune 21, 2015
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