In this assignment you will calculate 1) the total debt D and 2) the weighted yield to maturity Rp for your assigned corporation. To find D and Rp we must create a table in Excel. A sample table is shown below. A ten-row version of this table Minimize File Preview ZOOM + BONDS FOR B D D E AMOUNT OUTSTANDING LAST TRADE PRICE 500,000,000 92.0 500,000,000 88.7 ( AB) / 100 MARKET VALUE 460,000,000 443,500,000 YTM 3.28 4.31 SYMBOL 1NKE3998567 2 NKE3998568 3 4 S 61 7 8 9 10 NKE.GE TOTAL % of TOTAL 0.455 0.439 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.106 1.000 11 F ( DE)/100 WEIGHTED YTM 1.493% 1.892% 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.062% 8.447% 100,000,000 107.0 0.59 107,000,000 1,010,500,000 NAME Nike 2.25% Nike 3.625% Nike Inc Mtn Be 5.15% AMOUNT 500,000,000 500,000,000 100,000,000 BONDS FOR NIKE B D E F ( AB) / 100 (DE)/100 PRICE MARKET VALUE % of TOTAL YTM WEIGHTED YTM 92.0 460,000,000 0.455 3.28 1.493% 88.7 443,500,000 0.439 4.31 1.892% 107.0 107,000,000 0.106 0.59 0.062% 1,010,500,000 1.000 3.4479 TOTAL 460,000,000 / 1,010,500,000 = 0.455 D = $1,010,500,000 Rp = 3.447% Notice in the table that columns C, D, and F are calculated from the values you will enter in the other columns. This blue data is found on the FINRA website. Please see the Study Guide "FINRA CORPORATE BONDS TOOL " Using the FINRA instructions, enter the blue data to complete the calculations in the excel table. Note: If your corporation has more than ten bonds, just choose any ten for your calculations in the Excel table. You will use your calculated D and Rp to complete the WACC calculation due next week. In a separate Word document answer the following questions (feel free to copy/paste these into your Word document): 1. Did your corporation have more than 10 bonds listed in FINRA? If so, approximately how many were listed? 2. Bond Maturity: Click on "Maturity" at the top of the FINRA Bonds list to sort by Maturity. 1. What maturity date is farthest into the future? Approximately how many years (or months) from now? 2. What maturity date is the next one to expire? Approximately how many years (or months) from now? 3. Refer to Figure 7.2 on page 200 in the text. In A or B above, which bond has the most interest rate risk? 3. The Call Provision: 1. Click on "Callable" at the top of the FINRA Bonds list. Are any of the bonds Callable? 2. Refer to "The Call Provision" on page 210 of the text. True or False: In a "make-whole" call provision, the call price is higher when interest rates are lower and vice versa. In this assignment you will calculate 1) the total debt D and 2) the weighted yield to maturity Rp for your assigned corporation. To find D and Rp we must create a table in Excel. A sample table is shown below. A ten-row version of this table Minimize File Preview ZOOM + BONDS FOR B D D E AMOUNT OUTSTANDING LAST TRADE PRICE 500,000,000 92.0 500,000,000 88.7 ( AB) / 100 MARKET VALUE 460,000,000 443,500,000 YTM 3.28 4.31 SYMBOL 1NKE3998567 2 NKE3998568 3 4 S 61 7 8 9 10 NKE.GE TOTAL % of TOTAL 0.455 0.439 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.106 1.000 11 F ( DE)/100 WEIGHTED YTM 1.493% 1.892% 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.062% 8.447% 100,000,000 107.0 0.59 107,000,000 1,010,500,000 NAME Nike 2.25% Nike 3.625% Nike Inc Mtn Be 5.15% AMOUNT 500,000,000 500,000,000 100,000,000 BONDS FOR NIKE B D E F ( AB) / 100 (DE)/100 PRICE MARKET VALUE % of TOTAL YTM WEIGHTED YTM 92.0 460,000,000 0.455 3.28 1.493% 88.7 443,500,000 0.439 4.31 1.892% 107.0 107,000,000 0.106 0.59 0.062% 1,010,500,000 1.000 3.4479 TOTAL 460,000,000 / 1,010,500,000 = 0.455 D = $1,010,500,000 Rp = 3.447% Notice in the table that columns C, D, and F are calculated from the values you will enter in the other columns. This blue data is found on the FINRA website. Please see the Study Guide "FINRA CORPORATE BONDS TOOL " Using the FINRA instructions, enter the blue data to complete the calculations in the excel table. Note: If your corporation has more than ten bonds, just choose any ten for your calculations in the Excel table. You will use your calculated D and Rp to complete the WACC calculation due next week. In a separate Word document answer the following questions (feel free to copy/paste these into your Word document): 1. Did your corporation have more than 10 bonds listed in FINRA? If so, approximately how many were listed? 2. Bond Maturity: Click on "Maturity" at the top of the FINRA Bonds list to sort by Maturity. 1. What maturity date is farthest into the future? Approximately how many years (or months) from now? 2. What maturity date is the next one to expire? Approximately how many years (or months) from now? 3. Refer to Figure 7.2 on page 200 in the text. In A or B above, which bond has the most interest rate risk? 3. The Call Provision: 1. Click on "Callable" at the top of the FINRA Bonds list. Are any of the bonds Callable? 2. Refer to "The Call Provision" on page 210 of the text. True or False: In a "make-whole" call provision, the call price is higher when interest rates are lower and vice versa