Question 2 Two companies, Midas and Gigant, would both like to borrow 150m for 10 years. The companies have been quoted the following interest rates on fixed and floating rate debt Midas: 4.15% fixed LIBOR + 0.10% floating Gigant: 6.30% fixed LIBOR + 0.85% floating Midas would prefer to borrow at a floating interest rate, while Gigant would prefer a fixed rate loan. SwapBank is proposing the two companies enter into an interest rate swap. SwapBank will charge a fee of 40 basis points for arranging the swap between the two companies. REQUIRED: What are the total joint savings available to companies Midas and Gigant from using a swap? 2.1 (4 %) If the two companies agree to split the savings equally, what will be the effective interest rates payable by Midas and Gigant on their debt? 2.2 (6 %)