Company A can borrow at 8% fixed for five years or at a floating rate of 6-month LIBOR plus 0.4%.Company B can borrow at 9% fixed for five years or at a floating rate of six month LIBOR plus0.6%. Assume company A wants to borrow at floating rate and company B wants to borrow at fixed rate. What are the effective borrowing rates for both company under a swap which earns 30 basis points for the arranging institution and is equally attractive for both A and B.

O LIBOR for company A and 8.6% for company B

O LIBOR + 0.15% for company A and 8.75% for company B

O LIBOR + 0.15% for company A and 8.6% for company B

O LIBOR for company A and 8.75% for company B

O None of the above.