Carter enterprises can issue floating-rate debt at libor 1


Carter Enterprises can issue floating-rate debt at LIBOR +1 percent or fixed-rate debt at 9.00%. Brence Manufacturing can issue floating-rate debt at LIBOR +2.4% or fixed-rate debt at 12%. Suppose Carter issues floating-rate debt and Brence issues fixed-rate debt. They are considering a swap in which Carter will make a fixed-rate payment of 7.30% to Brence, and Brence will make a payment of LIBOR to Carter. What is the net payment for Carter if they engage in the swap? A negative net payment should be indicated with a minus sign. Round your answer to two decimal places.

___%

What is the net payment for Brence if they engage in the swap? A negative net payment should be indicated with a minus sign. Round your answer to two decimal places.

-(LIBOR + ___%)

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Financial Management: Carter enterprises can issue floating-rate debt at libor 1
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