Given the following information:

Firm Alpha Firm Beta

Credit Preference Maturity Fixed Floating

$7$ years $7$ years

Fixed Rate $8\%5\%$

Floating Rate LIBOR$+1\%$ LIBOR

Design a swap arrangement and calculate the pay$-$off to each firm $($assuming that they will equally split the spread differential$).$

Given the following information:

Firm Alpha Firm Beta

Credit Preference Maturity Fixed Floating

$7$ years $7$ years

Fixed Rate $8\%5\%$

Floating Rate LIBOR$+1\%$ LIBOR

Design a swap arrangement and calculate the pay$-$off to each firm $($assuming that they will equally split the spread differential$).$