Question: A company has issued floating rate notes with a maturity of one year, an interest rate of Libor plus 125 basis points, and total face

A company has issued floating rate notes with a maturity of one year, an interest rate of Libor plus 125 basis points, and total face value of $50 million. the company now believes that interest rates will rise and wishes to protect itself by entering into an interest rate swap. A dollar provides a quote on a swap in which the company will pay a fixed interest rate 6.5% and receive libor. Interest is paid quarterly and current Libor is 5%. the overall net payment is ?

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