Can you please provide the explanation, formula and correct answer for the problem above?

Company A desires a fixed-rate loan. Company A presently has access to floating interest rate funds at LIBOR+2%. Its borrowing cost is 15% in the fixed-rate bond market. In contrast, company B, which prefers a floating-rate loan, has access to fixed-rate funds at 12% and floating-rate funds at LIBOR +1%. Suppose both companies enter into an interest rate swap and split the spread differential; that is, they share the spread differential equally. With the swap deal, what interest rate would Company A pay for its fixed-rate funds? Note: Here the two firms enter into the swap deal directly without a bank, or you can assume they enter into it with a bank, but the gain to the bank from the swap is zero. Select one: C a. 13.5% 0 b. 14.5% 0 C. 14% 0 d. 13%