Question: Alpha and Beta Companies can borrow for a five - year term at the following rates: Alpha Beta Moody s credit rating Aa Baa Fixed

Alpha and Beta Companies can borrow for a five-year term at the following rates:
Alpha Beta
Moodys credit rating Aa Baa
Fixed-rate borrowing cost 10.1%11.6%
Floating-rate borrowing cost LIBOR LIBOR +1%
Calculate the quality spread differential (QSD)(if your answer is 10.1%, just enter "10.1").

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