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Read the discussion paper INTEREST RATE SWAPS AT HOLOGEN INC and answer the following question: If HOLOGEN issues a floating rate note and engages in

Read the discussion paper “INTEREST RATE SWAPS AT HOLOGEN INC” and answer the following question:

If HOLOGEN issues a floating rate note and engages in the interest rate swap, what is the net cost of financing for HOLOGEN after the interest rate swap? How does this compare to the cost of financing if HOLOGEN issues a fixed rate bond?

If LC Inc issues a fixed rate bonds and engages in the interest rate swap, what is the net cost of financing for LC Inc. after the interest rate swap? How does this compare to the cost of financing if LC Inc issues a floating rate note?

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