3. To get Disney's cost of debt and the market value of its long-term debt, you will...

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3. To get Disney's cost of debt and the market value of its long-term debt, you will need the price and yield to maturity on the firm's existing long-term bonds. Go to http://www.finra.org, click 'Investors' and then under "Market Data," click 'Bonds'. Under "Quick Bond Search," click "Corporate," type Disney's ticker symbol (DIS), and click "Search". A list of Disney's outstanding bond issues will appear. Assume that Disney's policy is to use the yield to maturity on non-callable 10-year obliga- tions as its cost of debt. Find the non-callable bond issue that is as close to 10 years from maturity as possible. (Hint: You will see a column titled "Callable"; make sure the issue you choose has "No" in this column.) You may have to choose a bond issued by one of its subsidiaries, like ABC. Find the yield to maturity for your chosen bond issue (it is in the column titled "Yield") and enter that yield as your pretax cost of debt into your spreadsheet. Next, copy and paste the data in the entire table into Excel.

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Fundamentals Of Corporate Finance

ISBN: 9781292018409

3rd Global Edition

Authors: Berk, Peter DeMarzo, Jarrad Harford

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