You are given the following information about a company. Their tax rate is 34%. The firm is in need of $5 million dollars in external funds. Your bond advisor suggests that new bond issues can be lower than the current yield to maturity by 2.0% .You are not sure he is correct.Should you issue the new debt to raise money?

Existing capital structure: Debt: 5,000 Eight percent (8%) coupon bonds outstanding. The par value is $1000 and they mature in ten years. They are currently selling for $1250 and make semiannual payments. Equity: 50,000 shares outstanding. The common stock is currently selling for $72 per share. The beta for the company is 1.15. Preferred Stock: 10,000 shares of 2% preferred stock with a par value of $100, and is currently selling for $65 per share. Market Information: The market return is 6% and the risk-free rate is 2%. The industry debt-equity ratio is 33%. The flotation rate for new debt is 3% and for new equity it is 5%. Calculate the existing weighted average cost of capital.