1. If a firm has borrowed $5m at a floating rate of LIBOR + 75 basis points...

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1.If a firm has borrowed $5m at a floating rate of LIBOR + 75 basis points (0.75%), and then enters into a swap to receive LIBOR and pay 6% fixed on $5m notional, what is the firm's effective interest rate on its borrowing?

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Introduction To Corporate Finance

ISBN: 9781118300763

3rd Edition

Authors: Laurence Booth, Sean Cleary

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Posted Date: Apr 17, 2024 05:01 AM

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1. If a firm has borrowed $5m at a floating rate of LIBOR + 75 basis points...

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To calculate the effective interest rate on the firms borrowing we need to c... View the full answer

Introduction To Corporate Finance

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