Why doesn’t the company enter into a 270-day swap starting in 90 days, so that they can pay at the lower floating interest rate in 90 days, which is the first payment?
R28 is options. R29 End of Chapter Question1? If so, the company has a issued floating rate obligation so any rate increases are going to hurt them if they don’t enter into a pay fixed receive float swap right now as the company expects rates to increase.