Question: Firm A can issue fixed rate debt @ 1 0 . 0 % and floating rate debt @ [ LIBOR + 2 0 1 0

Firm A can issue fixed rate debt @ 10.0%and floating rate debt @ [LIBOR+20100]%,that is,LIBOR +20bps.
Firm B,less credit worthy, can issue fixed rate debt @ 12.0%and floating rate debt @ [LIBOR+60100]%,that is,LIBOR

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