CNOOC recently made an offer of $67 per share for Unocal. As part of
the takeover, CNOOC will receive $7 billion in ‘cheap’ loans from its
parent company: a zero-interest, 2-year loan of $2.5 billion and a
3.5%, 30-year loan of $4.5 billion. If CNOOC normal borrowing rate is
8%, how much is the interest subsidy worth?