And work out two we're going to calculate the weighted average cost of the liabilities of the following debt holders. These are the dead holders that own the tranches of debt within the special purpose vehicle. So their liabilities because these payments are going to be made by the issuer to the debt holders. So again, the first thing we need to do here is calculate the rate.

and I'm going to take the spread and once again have to convert the basis points into an actual percentage. So I'm just going to divide it by 100 divided by 100 again and then add it to the three-month secured overnight financing rate.

And that gets me a rate on the Triple A tranche of 1.3% Now I have to wait this by the amount of the total debt financing the total liabilities that the Triple A tranche makes up.

So in order to do that, I'm going to take the triple a trans and divide it by the sum of the entire.

set of liabilities and that's up through or down to the b-rated trash I'm not going to include the equity charge because they are not paid.

A financing rate. That's the residual trash. So the triple a transcript makes up 69% of the total debt financing.

So to apply that weighting to the interest that is actually paid out gives us a weighted average.

cost of this particular liability of 0.90 percent If I copy this down.

I will see the weighted average costs to all of the other tranches. So even as the rates increase significantly for the lower rated tranches the more Junior trash is because they make up such a small percentage of the portfolio the overall cost to the issuer is quite low.

So now I will take the sum of these to determine the weighted average cost of liability in total to the issuer and that's one point eight three percent. The total capital is the same as it was in workout one and that's 400 including the equity.