Question
Assume CVS Corporation discloses the following footnote in its 10-K relating to its debt. BORROWING AND CREDIT AGREEMENTS Following is a summary of the Companys
Assume CVS Corporation discloses the following footnote in its 10-K relating to its debt.
BORROWING AND CREDIT AGREEMENTS
Following is a summary of the Companys borrowings as of the respective balance sheet dates.
In millions |
|
| Dec. 31, 2016 | Dec. 31, 2015 | ||
| Commercial paper |
| $ 253.4 | $ 885.6 |
| |
| 5.625% senior notes due 2017 |
| 300.0 | 300.0 |
| |
| 3.875% senior notes due 2018 |
| 300.0 | 300.0 |
| |
| 4.0% senior notes due 2020 |
| 650.0 | 650.0 |
| |
| 4.875% senior notes due 2025 |
| 550.0 | 550.0 |
| |
| 8.52% ESOP notes due 2019 |
| 114.0 | 140.9 |
| |
| Mortgage notes payable |
| 21.0 | 14.8 |
| |
| Capital lease obligations |
| 0.7 | 0.8 |
| |
|
|
| 2,189.1 | 2,842.1 |
| |
| Less: |
|
|
|
| |
| Short-term debt |
| (253.4) | (885.6) |
| |
| Current portion of long-term debt |
| (341.6) | (30.6) |
| |
|
|
| $1,594.1 | $1,925.9 |
| |
CVS also discloses the following information.
Interest expense, netInterest expense was $117.0 million, $64.4 million and $53.9 million, and interest income was $6.5 million, $5.7 million and $5.8 million, in 2016, 2015 and 2014, respectively. Interest paid totaled $135.9 million in 2016, $70.4 million in 2015 and $64.9 million in 2014.
What is the average coupon rate (interest paid) and the average effective rate (interest expense) on CVS long-term debt? (Hint: Use the disclosure for interest expense, net.)
Coupon Rate:4.81% Effective Rate:4.80%
Coupon Rate:5.02% Effective Rate:6.12%
Coupon Rate:5.20% Effective Rate:5.03%
Coupon Rate:5.40% Effective Rate:4.65%
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