Explore BrainMass
Share

Zhao Automotive issues fixed-rate debt at a rate of 7.00%.

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Zhao Automotive issues fixed-rate debt at a rate of 7.00%. Zhao agrees to an interest
rate swap in which it pays LIBOR to Lee Financial and Lee pays 6.8% to Zhao.

What is Zhao's resulting net payments?

Net payment = Libor + .02%

How would I calculate this with equations?

© BrainMass Inc. brainmass.com October 25, 2018, 4:55 am ad1c9bdddf
https://brainmass.com/business/interest-rates/zhao-automotive-issues-fixed-rate-debt-at-a-rate-of-7-00-399509

Solution Preview

Zhao Automotive issues fixed-rate debt at a rate of 7.00%. Zhao agrees to an interest
rate swap in which it pays ...

Solution Summary

Zhao Automotive issues fixed-rate debt at a rate of 7.00%. Zhao agrees to an interest
rate swap in which it pays LIBOR to Lee Financial and Lee pays 6.8% to Zhao.

What is Zhao's resulting net payments?

Net payment = Libor + .02%

How would I calculate this with equations?

$2.19