Assume firm xxx can borrow usd for 10 years at 5% and can borrow at a variable
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Assume firm xxx can borrow usd for 10 years at 5% and can borrow at a variable rate of libor + 2%
firm yyy can borrow usd for 10 years at 5.5% and can borrow at a variable rate of libor.
Firm xxx wants to borrow at a variable rate and firm YYY wants to borrow at a fixed rate.
If a swap dealer arranges the swap and profits by 1%, and firm XXX and firm YYY split the remaining savings, what is the firm YYY has a final cost of?
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
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