| Cott Bond Issues | |||||||
| Name | Maturity | Par Value | Price | Market Value | Weight of Issue | YTM | |
| Cott Beverages 6.75% | 1/1/2020 | 625,000,000 | 104.00 | 650,000,000 | 0.0571 | ||
| Cott Beverages 10.00% | 1/1/2021 | 350,000,000 | $112.46 | 393,610,000 | 0.0600 | ||
| Cott Beverages 5.375% | 7/1/2022 | 525,000,000 | 98.00 | 514,500,000 | 0.0570 | ||
| Cott Beverages 5.5% | 1/1/2024 | 474,100,000 | $97.34 | 461,488,940 | 0.0600 | ||
| 1,974,100,000 | Total Market Value of Debt: | 2,019,598,940 |
Pretax Cost of Debt |
||||
Calculate the weight of issue and Pretax cost of debt
Weight of issue = market value of issue/total market value of debt
weight of cott beverages( 6.75%) =650000000/2019598940 =.3218=32.18%
weight of cott beverages( 10%) =393610000/2019598940 =.1949=19.49%
weight of cott beverages( 5.375%) =514,500,000/2019598940 =.2547=25.47%
weight of cott beverages( 5.5%) =461,488,940/2019598940 =.2285=22.85%
---
pretax cost of debt= sum of ( weights of issue* YTM of issue)
=.3218*5.71 +.1949*6+.2547*5.7+.2285*6 =5.829% =.05829
Get Answers For Free
Most questions answered within 1 hours.