Alice Bank has an ROE objective of 12%, is subject to an average tax rate of 35%, and provides the following information regarding the loans that it extends to its corporate customers:

Liquidity requirement of the bank (as a % of total assets)	6.0%
Yield earned on liquid assets	1.5%
Deposit rate paid by the bank	0.25%
Default probability of the loan	4.5%
Estimated recovery rate	68.0%
Capital adequacy rate	8.0%
Capital adequacy weighting of the loan	100.0%
Administrative costs	2,000$

A particular corporate, customer of Alice Bank, has received an offer for a $25 million for 5 years loan from a competing bank, at a rate of 2.8%.

Alice assesses that corporates is that sector usually have a default probability of 4.5% and a recovery rate of 68%.

a) Compute the rate whether Alice Bank could beat it to keep its customer?

b) If not, what else could Alice Bank do to attract the loan?