calculate the interest expense on table 8.7. (attached below)There is circular reasoning involved in estimating the interest
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calculate the interest expense on table 8.7. (attached below)"There is circular reasoning involved in estimating the interest expense. The interest rate is needed to calculate the interest coverage ratio, and the coverage ratio is necessary to compute the interest rate. To get around the problem, we began our analysis by assuming that you could borrow $ 6,977 billion at the AAA rate of 4.35%; we then computed an interest expense and interest coverage ratio using that rate, and estimated a new rating of AA for Disney. We recomputed the interest expense using the AA rate14 of 4.50% as our cost of debt." Also, calculate the tax rate on the same table 8.7
Related Book For
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen
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