Company x wants to borrow $10,000,000 floating for 5 years; company y wants to borrow $10,000,000 fixed for 5 years. their external borrowing opportunities are shown below:

a swap bank proposes the following interest only swap:

x will pay the swap bank annual payments on $10,000,000 with the coupon rate of libor; in exchange the swap bank will pay to company x interest payments on $10,000,000 at a fixed rate of 10.05%. y will pay the swap bank interest payments on $10,000,000 at a fixed rate of 10.30% and the swap bank will pay y annual payments on $10,000,000 with the coupon rate of libor - 0.15%.

(a) what is the qsd?

(b) what are the dollar gains to the swap bank. company x and company y? (10)