Finance bonds excel
elhamkh
ch_15_emn_bonds_example_new.xlsMV and Cost of Debt
| Data was looked up on 1-24-2008 | ||||||||
| Symbol | Price (% par) | Coupon | Maturity Date | Yield | S&P Rating | Par Outstanding (in 000s) | MV Debt | Contribution to Cost of Debt |
| EMN.GB | 105.698% | 7.25% | 1/15/24 | 6.666% | BBB | $ 500,000 | $ 528,490.000 | 2.6731% |
| EMN.GC | 107.868% | 7.63% | 6/15/24 | 6.823% | BBB | $ 200,000 | $ 215,736.000 | 1.1169% |
| EMN.GD | 107.000% | 7.60% | 2/1/27 | 6.932% | BBB | $ 300,000 | $ 321,000.000 | 1.6884% |
| EMN.GE | 109.371% | 7.00% | 4/15/12 | 4.556% | BBB | $ 146,498 | $ 160,226.328 | 0.5539% |
| EMN.GF | 98.525% | 3.25% | 06/15/2008 | 6.358% | BBB | $ 71,966 | $ 70,904.502 | 0.3421% |
| EMN.GG | 103.816% | 6.30% | 11/15/18 | 5.817% | BBB | $ 20,766 | $ 21,558.431 | 0.0952% |
| Total | $ 1,317,915.260 | 6.4695% | ||||||
| Corporate Tax Rate | 35% | |||||||
| Post-tax cost of debt | 4.205% | |||||||
| data is from www.finra.org | ||||||||
| go to investor information tab | ||||||||
| look under "market information" | ||||||||
| select "bonds" on the left | ||||||||
| look up under symbol for the stock "EMN" and select the "Corporate" radio button | ||||||||
| select bond issue and you will get all kinds of data |
MV Equity & Beta
| As of Close of Trading 1-23-2008 | |
| Share Price | $ 60.46 |
| Shares Outstanding (1000s) | 80,940 |
| Market Cap | $ 4,893,632.40 |
| Dividend Growth Rate (g) | 3.45% |
| Forward Dividend Yield (D1/P0) | 3.00% |
| Return on Equity [Re = (D1/P0)+g] | 6.45% |
| Beta | 0.74 |
| 6 month T-Bill Rate (Rf) | 2.23% |
| Market Risk Premium (MRP) | 8.50% |
| Return on Equity (Re) SML Approach | 8.52% |
| V = D + E = Market Value (1000s) | $ 6,211,547.66 |
| D/V | 21.22% |
| E/V | 78.78% |
| Post-Tax WACC using SML cost of Equity | |
| WACC = (D/V)*Rd*(1-T)+ (E/V)*Re | 7.605% |
Linus:
Linus:
Taken from page 389 table 12.4 of your text. This is the difference between the average arithmtic return of large company stocks and t-bills from 1926 - 2007 12.3% - 3.8%.
