Question: please show all work! 3. A and B can borrow for a 5-yrear term at the following rates: A B Rating Baa Fixed rate borrowing

please show all work! 3. A and B can borrow for

please show all work!

3. A and B can borrow for a 5-yrear term at the following rates: A B Rating Baa Fixed rate borrowing cost 10.5% 13.0% Floating rate LIBOR+0.5% LIBOR+1.5% a. Calculate QSD (5%) b. If A agrees to pay LIBOR+1% to B in return for a fixed rate of 12%, what is the all-in cost for A and B, respectively? (12%) c. Continued from b, how do A and B share the QSD from the swap? (5%)

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