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QUESTION:
Calculate Market Value of Debt
Additional Info:
Analysts expect the firm’s revenues, earnings, capital expenditures, and
The depreciation expense for 2019 is $5.182 billion.
Capital spending is expected to offset depreciation in the stable state period.
The yield on 30-year treasury bonds is 2% and the equity market risk premium is 6.2%.
The shares outstanding as of 12/31/2019 were 3,516,000,000 and the stock price was $60 per share.
The average price of the company’s long-term corporate Bonds was 123.95 with an average yield to maturity of 4.16%. The company’s long-term bonds have a bond rating of AA.
Shares Outstanding | 3,516,000,000 |
Stock Price | $60 |
Yield (30Y Treasury) | 2% |
Equity Market Risk Prem. | 6.2% |
Avg. Price LT Corp. Bond | 123.95 |
Avg. YTM | 4.16% |
Depreciation Expense (2019) | 5,182,000,000 |
Current Stock Price | 54.58 |
Beta | 0.44 |
Shares Outstanding | 3,516,000,000 |
Estimated Growth Rate in Earnings (2Y) | 9.9 |
Equity Market Risk Prem. | 6.2% |


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