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The first step in determining FVW s WACC is to estimate the market value of its debt. It is generally safe to assume that the
The first step in determining FVWs WACC is to estimate the market value of its debt. It is generally safe to assume that the market value and book value of current debt are the same, since they should be paid off within a year. However, the market value of noncurrent debt can differ from its book value. FVWs noncurrent debt consists of a single privately placed bond issue with a total face total value of $ that pays a semiannual coupon of pa The bonds will mature in five years and their yieldtomaturity is pa with semiannual compounding. The worksheet Question provides a space for you to calculate the price of FVWs bond. Use this value to ebstimate the market value of the firms debt. State this value in your report and explain how you calculated it Be sure to explain the assumptions you made and provide details of how you priced the bonds.
The first step in determining FVWs WACC is to estimate the market value of its debt. It is generally safe to assume that the market value and book value of current debt are the same, since they should be paid off within a year. However, the market value of noncurrent debt can differ from its book value. FVWs noncurrent debt consists of a single privately placed bond issue with a total face total value of
$ that pays a semiannual coupon of pa The bonds will mature in five years and their yieldtomaturity is pa with semiannual compounding. The worksheet Question provides a space for you to calculate the price of FVWs bond. Use this value to ebstimate the market value of the firms debt. State this value in your report and explain how you calculated it Be sure to explain the assumptions you made and provide details of how you priced the
bonds.
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