Company E presently has access to floating interest rate funds at a margin of 3% over LIBOR. Its direct borrowing cost is 12% in the fixed-rate bond market. In contrast, company F has access to fixed-rate funds at 11% and floating-rate funds at LIBOR+1%. Is the fixed rate or the floating rate the better deal for Company E?

Select one:

a. Fixed rate

b. Can't tell from the information given.

c. Variable rate