Company A has a fixed borrowing cost of 3% and float rate cost of LIBOR. Company B has a fixed-rate borrowing cost of 4% and a float rate cost of LIBOR +0.6%. Which of the following is true?

1. The QSD is 3%

2. The QSD is 1%

3. The QSD is 0.6%.

4. The QSD is 0.4%