Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. company a requires a floating rate loan and compan

Company A requires a floating rate loan and Company C requires a fixed rate loan....

80.2K

Verified Solution

Question

Finance

image

Company A requires a floating rate loan and Company C requires a fixed rate loan. Company A has been offered a fixed rate loan at 4.4% and a floating rate loan at LIBOR + 0.3%. Company C has been offered a fixed rate loan at 5.8% and a floating rate loan at LIBOR + 1%. They enter into a swap using a bank as an intermediary; the bank takes a net of 30 basis points; this charge is shared equally by the companies. The swap arrangements are equally beneficial to both companies. The overall rate paid by Company A is then LIBOR + %. The net rate paid by Company C to the bank is % LI BOR

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Algebra
1.2K views

Perform the operations and simplify. Leave your answer in exponential form.3a?.2a^3/2

Medical Sciences
1.2K views

Why is the presence of arteriosclerosis in the older person result in increase of systolic pressure...

Medical Sciences
1.2K views

An athlete with a mass of 70 kg is performing a barbell back squat exercise with...

Medical Sciences
1.2K views

A 46-XX female fetus has a mutation that causes her to produce excess 5-alpha reductase. What...

Physics
1.2K views

A circuit consists of an 92- resistor in series with a 5.9-?F capacitor, the two being...

Physics
1.2K views

Equal amount of same gas in two similar cylinders A and B compressed to same...

Physics
1.2K views

b The displacement y of a point on a vibrating stretched string at a distance...

Physics
1.2K views

A uniform chain of length L and mass M is lying 1th on a table...

Geometry
1.2K views

Luther made a time capsule to share all of his favorite stuff with the future...

Statistics
1.2K views

Given the function f x 4 f x solve for the following values If the...

Calculus
1.2K views

Match the following expressions that have the same trig values cot 180 cos 3 sin...

Accounting
1.2K views

Stacey qualifies for the Used Clean Vehicle Credit. She purchased a used clean vehicle for...