Question
Fill out the table below for each of BBY's outstanding bond issues. What is the weighted average cost of debt for BBY using book value
Fill out the table below for each of BBY's outstanding bond issues.
What is the weighted average cost of debt for BBY using book value weights and then using market value weights? (Book values are listed below. Market values depend on the price (percent of par) in the screenshots above multiplied by the book value but be careful about where the decimal place goes.) Assume par rate is $1000.
How much difference does it make for cost of debt if you use book value weights compared to market value weights?
You can use a table like the one below to formulate your answer:
| A | B | C | D | E | F | G=C*F | H=E*F |
| Coupon Rate | Book Value (millions) | Percent of Total | Market Value (millions) | Percent of Total | Yield to Maturity | Cost of Debt - Book Value weights | Cost of Debt - Market Value weights |
| 4.450% | $500 | ||||||
| 1.950% | $650 | ||||||
| Totals |
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