Find the All-In-Cost of a Swap to a Party That

Multiple Choice

Find the all-in-cost of a swap to a party that has agreed to borrow $5 million at 5 percent externally and pays LIBOR + ½ percent on a notational principal of $5 million in exchange for fixed rate payments of 6 percent.

A) LIBOR + ½ percent
B) LIBOR
C) LIBOR - ½ percent
D) None of the above