1) Steelers & Penguins Sports Clubs both seek the lowest financing cost. They face the following rates: Steelers Penguins Credit Rating A BBB Cost of fixed funds 4.0% 5.5% Cost of floating funds 6 MO Libor + 1.00% 6 MO Libor + 1.75% If a swap is set up such that any potential savings are divided equally between the two clubs, what will be the net post swap cost for Steelers?

a.Libor 0.375

b. 4.75%

c. 3.625%

d. Libor + 0.625