Cost and Market Value of Debt Model
This tool is a quick and easy way of calculating a business' cost and market value of debt. This tool will help you to calculate three important figures:
- How much debt the business has
in conventional interest bearing debt
- What to do about those lease
commitments which should be
treated as debt
- Pre tax and post tax cost of debt
Using this tool in conjunction with the helpful video attachment will show you how to find out a company's long term debt, current instalments of long term debt, interest expense for the most recent year as well as the company's operating income.
Furthermore, he shows how to calculate the maturity of debt, followed by any lease commitments that a business may have. These figures can then be inputted into the spreadsheet in order to calculate the book value of interest bearing debt, interest expenses, weighted average maturity of debt and the overall operating income before interest and taxes. This tool also allows you to document your business' lease commitments on a year-by-year basis.
The tabs will allow you to document the operating leases, MV of debt, weighted maturity of debt and the synthetic rating of your business.
Aswath's video guide to this tool uses Home Depot as a template for how you can use this model. As such, he makes the tool quick and easy to understand so that you can go on to calculate your business' cost of debt.
- How much debt the business has
in conventional interest bearing debt
- What to do about those lease
commitments which should be
treated as debt
- Pre tax and post tax cost of debt
Using this tool in conjunction with the helpful video attachment will show you how to find out a company's long term debt, current instalments of long term debt, interest expense for the most recent year as well as the company's operating income.
Furthermore, he shows how to calculate the maturity of debt, followed by any lease commitments that a business may have. These figures can then be inputted into the spreadsheet in order to calculate the book value of interest bearing debt, interest expenses, weighted average maturity of debt and the overall operating income before interest and taxes. This tool also allows you to document your business' lease commitments on a year-by-year basis.
The tabs will allow you to document the operating leases, MV of debt, weighted maturity of debt and the synthetic rating of your business.
Aswath's video guide to this tool uses Home Depot as a template for how you can use this model. As such, he makes the tool quick and easy to understand so that you can go on to calculate your business' cost of debt.