For this problem, I already knew that a swap with C could generate the highest total benefit of 1.5% but how to get the lowest possible effective floating-rate financing cost? Thank you.

(a) Suppose you operate a Canadian firm and would like to borrow C$100,000 to finance the business. Because of the nature of your business, you would like to secure effectively floating-rate financing. Your firm will need to pay interest rates of 6.6% and LIBOR +2.7% if it borrows at fixed and floating interest rates respectively. You are considering the possibility of reducing your financing costs by setting up an interest rate swap with one of three companies (Company A, Company B or Company C ). Because of their business needs, all three companies need to secure effectively fixed-rate financing. They face the following interest rates. E Setting up an interest rate swap with which of these three companies will result in the largest potential reduction in financing costs? What is the lowest possible effective floating-rate financing cost (in \%) for your firm by entering into an interest rate swap with this company? Should your firm be a swap buyer or a swap seller? Outline the terms of an interest rate swap that can equally split the total savings in financing costs between your firm and that counterparty company