AB5 Corp. has a five-year $200M debt at LIBOR, but prefers fixed rate instead. It can borrow fixed rate at 4%. XY6 Ltd. has an existing five-year $200M debt at 5% and prefers floating-rate instead. It can borrow floating at LIBOR +1.5%. If the two enter an interest rate swap, and gains to the firm having absolute advantage in the rates should be four times better off than the gains to other firm, what would each end up paying?

Select one:

a. AB5: 3.9%, XY6: LIBOR+1.1%

b. AB5: 5.1%, XY6: LIBOR+0.4%

c. AB5: LIBOR-0.4%, XY6: 4.4%

d. AB5: LIBOR-0.9%, XY6: 4.6%

e. AB5: 3.6%, XY6: LIBOR+1.4%

f. AB5: 5.4%, XY6: LIBOR+0.1%

g. AB5: LIBOR-0.6%, XY6: 4.9%