Worth of long-term bonds at fixed rate

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Reference no: EM131566283

Sahali Trading Company has issued $300 million worth of long-term bonds at a fixed rate of 8.5%. Sahali Trading Company then enters into an interest rate swap where they will pay LIBOR and receive a fixed 7.5% on a notional principal of $300 million. After all these transactions are considered, Sahali Trading Company's cost of funds is:

Reference no: EM131566283

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