In order to estimate FVW$$s cost of debt, you need to calculate a weighted average of its cost of current

debt and its cost of non$-$current debt. The cost of non$-$current debt is just the yield on the on the bond $($$$329,375)$ so you need to figure out the cost of current debt. You begin by observing that FVW

paid $$698,000$ in interest in $2023.$ When you look at the balance sheet, you note that the only liabilities

that charge interest are short$-$term loans $($part of current liabilities$)$ and long$-$term debt $($part of non$-$

current liabilities$)-$ Short term loan $=1,098,000\mathrm{.}00$ and long term debt $=15,009,00\mathrm{.}00.$ Since long$-$term debt is the above$-$mentioned bond, if you subtract its annual coupon

for $2023$ from the total amount of interest paid during the year, you will obtain the amount of interest

FVW paid on its short$-$terms loans. You decide to convert this amount into an interest rate and use it

as the cost of current debt.

The worksheet Question $2$ provides a space for you to estimate FVW$$s cost of current debt. Estimate

its overall cost of debt as a weighted average of the costs of its current and non$-$current debt. State the

value in your report and explain how you obtained it$.$ Be sure to explain how you derived the weights

that were used to calculate the weighted average above.