Axil Corp. has not tapped the Deutsche mark public debt market because of concern about a likely appreciation of that currency and only wishes to be a floating-rate dollar borrower, which it can be at LIBOR + 1%. Bevel Corp. strongly prefers fixed-rate DM debt, but it must pay 1.5% more than the 6 1/4% coupon that Axil's DM notes would carry. Bevel, however, can obtain Eurodollars at LIBOR + %.Suppose a bank charges .8% to arrange the swap and Axil and Bevel split the resulting cost savings. Then Axil will pay --- for its floating-rate money and Bevel will pay ---- for its fixed-rate money.

A) LIBOR - 0.7%; 7.5%

B) LIBOR +0.4%; 7.15%

C) LIBOR; 7.45%

D) LIBOR + 0.5%; 6.75%