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Consider the borrowing cost faced by the following three companies: Fixed Floating A 5.0% LIBOR+0.6% B 6.0% LIBOR+1.3% C 7.0% LIBOR+2.5% Suppose company A wants

Consider the borrowing cost faced by the following three companies:

Fixed Floating

A 5.0% LIBOR+0.6%

B 6.0% LIBOR+1.3%

C 7.0% LIBOR+2.5%

Suppose company A wants to borrow floating rate funds. Is it possible for A to reduce its cost of borrowing bellow LIBOR+0.6%, and if so what is the lowest possible cost it could achieve?

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