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b. A plc wants to borrow N200 million for five years with interest payable at six-monthly intervals. It can borrow from a bank at a floating rate of NIBOR plus 1% but wants to obtain a fixed rate for the full five-year period. A swap bank has indicated that it will be willing to receive a fixed rate of 8.5% in exchange for payments of six-month NIBOR.
Required:
Calculate the fixed interest six-monthly payment with the swap in place. (4 Marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
b. A plc wants to borrow N200 million for five years with interest payable at six-monthly intervals. It can borrow from a bank at a floating rate of NIBOR plus 1% but wants to obtain a fixed rate for the full five-year period. A swap bank has indicated that it will be willing to receive a fixed rate of 8.5% in exchange for payments of six-month NIBOR.
Required:
Calculate the fixed interest six-monthly payment with the swap in place. (4 Marks)
Find Related Questions by Tags, levels, etc.
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