Principles of Corporate Finance

SWAPS

example - cont.
Benefit to XYZ Net position
floating +7.25 -7.25 0
fixed +10.50 -10.00 +.50
Net gain +.50%

Benefit ABC Net Position
floating +7.25 - 7.50 -.25
fixed -10.50 + 11.50 +1.00
net gain +.75%