Question
1a You now need to calculate the cost of debt for Tesla. Consider the following four bonds issued by Tesla: What is the weighted average
1a You now need to calculate the cost of debt for Tesla. Consider the following four bonds issued by Tesla: What is the weighted average cost of debt for Tesla using the book value weights and the market value weights? Does it make a difference in this case if you use book value weights or market value weights? 04/20/2020
Why is my book value weights and market value weights percentage the same amount but the total is different? Did I input the formula wrong? Please help
Book Value | Book Value Weight | Yield to Maturity | Weighted Average Cost | |
1 | 1,200,000 | 32.88% | -70.183 | -23.07386301 |
2 | 850,000 | 23.29% | -39.192 | -9.12690411 |
3 | 1,600,000 | 43.84% | -20.192 | -8.851287671 |
Total | 3,650,000 | |||
Weighted Average Cost of Debt (Book Value) | ||||
Market Value | Market Value Weight | Yield to Maturity | Weighted Average Cost | |
1 | 1,380,000 | 32.88% | -70.183 | |
2 | 977,500 | 23.29% | -39.192 | |
3 | 1,840,000 | 43.84% | -20.192 | |
Total | 4,197,500 | |||
Weighted Average Cost of Debt (Market Value) |
Am I doing the formula wrong because I'm getting the same market and book value?
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