If a Firm Purchases a Cap at 10% This Will

Multiple Choice

If a firm purchases a cap at 10% this will:

A) limit the amount of borrowing to 10% of assets.
B) pay the firm 10% on their purchase.
C) pay the holder the LIBOR interest above 10%.
D) pay the holder the LIBOR interest below the 10%.
E) None of the above.