Calculate the firms cost of new debt

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Reference no: EM13937468

Rezek Razors issued a bond 5 years ago with a 5% coupon and a par value of $310 million. The bond currently yields 6% and trades at 105% of par. The company also issued a bond 3 years ago with a 6% coupon and a par value of $120 million. The bond currently yields 5% today and trades at 95% of par. Calculate the firm's cost of new debt.

5.99%

5.49%

6.24%

5.74%

Reference no: EM13937468

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Calculate the firms cost of new debt : Rezek Razors issued a bond 5 years ago with a 5% coupon and a par value of $310 million. The bond currently yields 6% and trades at 105% of par. The company also issued a bond 3 years ago with a 6% coupon and a par value of $120 million. The bond cur..

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