LIBOR (London Interbank Offered Rate) is a benchmark rate that represents the interest rate at which banks offer to lend funds to one another in the international interbank market for short-term loans. LIBOR is an average value of the interest-rate which is calculated from estimates submitted by the leading global banks on a daily basis. A company may raise debt financing either through bank loans or bond issues. In both types of borrowing, the interest rate may be either fixed or floating. If the rate is floating, then an index is used to determine the interest payments for each period. For example, banks borrow from international bank loans at floating rates and the index is almost always the LIBOR. Hence, a bank borrowing from the international banks pays LIBOR as the base rate and an additional risk premium. The correct answer is C.