Calculate the cost of new debt:
Bond 1: issued 5 years ago
Coupon = 5%
Par Value $660,000,000.00
Currently Yeilds: 6 Percent
Trades @: 105% of Par
Bond 2: Issued 3 years ago
Coupon = 6%
Par Value $470,000,000.00
Currently Yeilds: 5 Percent
Trades @: 95% of Par
