Question 5 1 pts Company X wants to borrow $10,000,000 floating for 5 years, company Y wants to borrow $10,000,000 fixed for 5 years. Their external borrowing opportunities are shown in the table below: A swap bank proposes the following interest only swap: X will pay the swap bank annual payments on $10,000,000 with the coupon rate of LIBOR -0.15% in exchange the swap bank will pay to company X interest payments on $10,000,000 at a fixed rate of 9.90% What is the value of this swap to company X? Fixed Rate Borrowing Cost Floating Rate Borrowing Cost 10% Company X Company Y LIBOR LIBOR+ 1.5% 12% Company X will lose money on the deal. Company X will save 25 basis points per year on $10,000,000 = $25,000 per year. Company X will only break even on the deal Company will save basis points per year on 510,000,000 - $5.000 per year