Company A, a US multinational corporation requires50,000,000for five years.

The exchange rate is $1.14/ and Company B, a European multinational corporation, requires the equivalent dollar amount, $57,000,000 (rounded)for five years.

Their borrowing options are given in the table below. The interest rates are annual rates.

"Original" Terms:

Counterparty	Dollar-denominated debt	Euro-denominated debt
A	4.84%	4.30%
B	5.95%	4.70%

Suppose that a swap bank offers the following terms:

• Dollars: 4.80% - 5.25%
• Euros: 4.10% - 4.20%

Company A: Borrows $57,000,000 at the terms above with the intention of swapping debt service into euros. This means they will pay the swap bank 4.20% on the euro value of the debt, in exchange for 4.8% on dollar debt from the swap bank.

Company B: Borrows 50,000,000 at the terms above with the intention of swapping debt service into dollars. This means they will pay the swap bank 5.25% on the dollar value of the debt, in exchange for 4.10% on euro debt from the swap bank.

Recommended: use a diagram to work out your answer on paper.

* Enter the result with two decimal * Company A's net interest after the swap will be (A)______%. Therefore, compared to their independent borrowing alternatives, they will save a total amount of _______(B) euros over 5 years.

1. Company B's net interest after the swap will be (A)_______%. Therefore, compared to their independent borrowing alternatives, they will save a total amount of (B)_______ dollars over 5 years.
2. The swap dealer makes________%.

Can you please solve step by step for me? Thank you!