You are the CFO of Carmean Corp. Carmean has decided to borrow $100,000,000 to finance expansion plans. One option is to issue 20-year bonds with a fixed rate of 8%. Carmean's investment bankers believe that these will sell for par. Another option is to issue 20-year bonds with a variable rate for 1-yar LIBOR (Londen Interbank Offered Rate) plus 5.4%. For the first year, this will result in a 6.5% rate, but the rate will be adjusted annually.

What types of things should you consider in making the decision about which borrowing option is best for Carmean?