Company requires a floating rate loan

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Reference no: EM131312882

Companies a and b have been offered the following rates per annum on a $100 million 5 year loan

Fixed rate floating rate

Company A 4.0% libor+0.2%

Company B 5.2% libor + 0.8 %

Company A requires a floating rate loan; company b requires a fixed rate loan. design a swap that will appear equally attractive to both companies

hint: figure out a range for the swap rate.

Reference no: EM131312882

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