Good Company prefers variable to fixed rate debt.
June 7th, 2024
Good Company prefers variable to fixed rate debt. Bad Company prefers fixed to variable ratedebt. Assume the following information for Good and Bad Companies: Fixed Rate Bond Variable Rate BondGood Company- 10% LIBOR + 1%Bad Company 12% LIBOR + 1.5a. Interest rate Swap possible here?b. Briefly explain how you know this possible?