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Company A and Company B both want to borrow 1,000,000 for three years. A wants borrow floating and B wants to borrow fixed. A and
Company A and Company B both want to borrow 1,000,000 for three years. A wants borrow floating and B wants to borrow fixed. A and B agree to equally split the cost savings. What are the borrowing costs after swap? Fixed Rate Floating Rate Borrowing Cost Borrowing Cost Company A 10% LIBOR Company B 1296 LIBOR + 1.596 a. A: LIBOR; B: 11.596 b. A: LIBOR -0.25%; B: 11.7596 None of these options d. A: LIBOR -0.596; B:1296
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