Your Firm Has Issued $100,000,000 Bonds with a Fixed Cost

Your firm has issued $100,000,000 bonds with a fixed cost of 10% to the firm.In addition,the firm has entered into a contract to pay a bank LIBOR + .5% while the bank pays the firm 8.5%,with both notional amounts also being $100,000,000.What is the total cost to your firm for the $100,000,000 borrowing?

A) LIBOR + 1%
B) LIBOR - 1%
C) LIBOR + 2%
D) LIBOR - 2%