This question is based on Popova and Simkins: The Value of OTC Derivatives: Case Study\ Analyses of Hedges by Publicly Traded Non-Financial Firms ISDA research paper, 2014.\ http://www2.isda.org/functional-areas/research/studies/\ You are the treasurer of Hilton Hotels (hereafter referred to as Hilton). During the period of the\ interest rate swap, Hilton together with its subsidiaries, owned and operated 60 hotels; leased and\ operated or managed 203 hotels about 3,000 hotels owned by others. Hilton had issued $375\ million fixed-rate senior notes that made semiannual payments based on an (annual) 7.95%\ coupon. Subsequently, interest rates fell substantially, and Hilton wanted to take advantage of the\ low interest rate environment and swap its fixed interest payments for floating-rate payments.\ Hilton can enter a swap that will exactly match its remaining fixed coupon payments. Under the\ terms of the 5-year swap, the fixed rate payer will pay an annual rate of 7.95% on $375 million,\ and the floating rate payer will pay the six-month LIBOR rate plus 415 basis points. (Recall, the\ difference between the payments is paid semiannually.)\ How can you convert your corporations fixed-rate debt into a synthetic floating rate debt? What\ is the annual synthetic floating-rate that your corporation will pay?