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Alpha and Beta Companies can borrow for a five-year term at the following rates: Alpha Beta Moodys credit rating Aa Baa Fixed-rate borrowing cost 10.9%

Alpha and Beta Companies can borrow for a five-year term at the following rates:

Alpha Beta

Moodys credit rating Aa Baa

Fixed-rate borrowing cost 10.9% 11.9%

Floating-rate borrowing cost LIBOR LIBOR + 0.8%

Calculate the quality spread differential (QSD) (if your answer is 10.1%, just enter "10.1").

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