Hello everyone, at the 2:53 mark, the answer should be $4,000,000 instead of $400,000. UA-cam won't allow me to put a note in the video so thought I'd add mention it in a public comment!
thank you sooooooo much . i really had a tough time trying to figure out my slides. you are making these calculations very simple. and increasing my love for the subject. i am very grateful
For market value of debt, can't we just use the book value of the interest-bearing debt and the coupon rate of interest? I believe, this is a very close approximation since a rise in market interest rates results in a fall in the market price of the debt and the two factors tend to offset each other.
The problem is that very few firms have all their debt in the form of bonds outstanding. A best approach is to convert book value debt into market value debt: Treat the entire debt on the books as one coupon bond, with a coupon set equal to the interest expenses on all the debt and the maturity set equal to the face-value weighted average maturity of the debt, and then to value this coupon bond at the current cost of debt for the company. I dont remember the exact equations, and that is the process I am looking for, but I have not find it yet.
You can get this value with bond pricing formula. You can compute this manually if you have the maturity, coupon rate, face value and yield to maturity. But the present value of a bond is given by the market.
Hey, how to count cost of debt if comany combine financing assets by bonds and loans, in other way when we dont know nothing about YTM about loans and cost of loans in %? Bonds we can get always from the internet but how to get data about loans and combine everything togheter?
What about a loan? What if the debt is just loans and not bonds? I've got a closing balance of loan debt on the balance sheet - £465,000,000 does that equals the market value of debt?
about bond, due to the maturity date, aren't companies getting the principals while also receiving coupon semi annually, or all the principal are paid at the maturity date ?
What if the company does not issue any bonds, how would I find market value of Debt? Ive been searching and havent found anywhere that show me ways to find market value of debt Withou the use of bonds
I have a question, can anyone help me with it: an issue was for £100 million and had a coupon interest rate of 7.46 percent. The entire issue was sold in 2012 in a private placement to two life insurance companies, and the issue will mature in 2043. what is the market value of this bond?
ughhhhhhhhhh!!! thanks for the heads up lol didn't notice. Good that it's not as important of a part in the video. I'll try putting a note to let people know.
Hello everyone, at the 2:53 mark, the answer should be $4,000,000 instead of $400,000. UA-cam won't allow me to put a note in the video so thought I'd add mention it in a public comment!
AllThingsMathematics hi teacher would I be able to get note material via email. Many thanks
I was scrolling down to see if you mentioned this :)
thank you sooooooo much . i really had a tough time trying to figure out my slides. you are making these calculations very simple. and increasing my love for the subject. i am very grateful
I gotta find some time after my exams to watch your videos about finance education 😅! Awesome content bro
I love the way you broke this down I appreciate that.
Your videos have been very helpful. I think I finally have a breakthrough in my class.
happy to hear :)
Thank you for your step by step instruction and explanation of each step; I am actually understanding this with the help of this video.
good to hear!
Thank you so much. You save my sleep in MBA journey.
at the 9:01 mark, how get the result of $1106.59 ? What's the equivalent ?
Your videos are great, so easy to understand. thank you so much
Thank you! Your answer of 1106.59 is calculating the full 7% NOT 3.5%. So, now I'm confused.
For market value of debt, can't we just use the book value of the interest-bearing debt and the coupon rate of interest? I believe, this is a very close approximation since a rise in market interest rates results in a fall in the market price of the debt and the two factors tend to offset each other.
Show manually without using calculator...how u get pv =1106.59
I still confused...
Hi, i like the show, How did you get PV=#1106.59?
The problem is that very
few firms have all their debt in the form of bonds outstanding. A best approach is to convert book value debt into market value debt: Treat the entire debt on the books as one coupon bond, with a coupon set equal to the interest expenses on all the debt and the maturity set equal to the face-value weighted average maturity of the debt, and then to value this coupon bond at the current cost of debt for the company. I dont remember the exact equations, and that is the process I am looking for, but I have not find it yet.
Perhaps this can help, ua-cam.com/video/7VFe5lcPnnc/v-deo.html
How did he compute the PV=$1106.59 ?
Do you know how
you can use excel function =PV to calculate :)
How can you get the present value of 1106.59. Which formula did you use? Can we compute by manually?
You can get this value with bond pricing formula. You can compute this manually if you have the maturity, coupon rate, face value and yield to maturity. But the present value of a bond is given by the market.
But what if the company's debt is not bonds but bank loans? Then how to calculate market value of debt?
Hey, how to count cost of debt if comany combine financing assets by bonds and loans, in other way when we dont know nothing about YTM about loans and cost of loans in %? Bonds we can get always from the internet but how to get data about loans and combine everything togheter?
What about a loan? What if the debt is just loans and not bonds?
I've got a closing balance of loan debt on the balance sheet - £465,000,000 does that equals the market value of debt?
At 4:16, how do you know that the face value per bond is 1000?
it's always 1000
about bond, due to the maturity date, aren't companies getting the principals while also receiving coupon semi annually, or all the principal are paid at the maturity date ?
What if the company does not issue any bonds, how would I find market value of Debt?
Ive been searching and havent found anywhere that show me ways to find market value of debt Withou the use of bonds
At 9:01, is there a formula one can use instead of using a financial calculator?
Life saving video...Thanks :)
How did you find the Price per Bond? 8:57
I have a question, can anyone help me with it: an issue was for £100 million and had a coupon interest rate of
7.46 percent. The entire issue was sold in 2012 in a private placement to two life insurance
companies, and the issue will mature in 2043. what is the market value of this bond?
Big thanks from South Africa
Great stuff, thank you!
Good video, helps a lot!
Thank you, its cleared.
Thank you so much for making these videos~!!
Nice one, thanks
hi great vid!!!! just one thing, where do you find the number and the price of the bond online?
How did he compute the PV=$1106.59
Did you know how
@@mohammedrashad6351 Did you ever find out??
Legend
Thanks :)
Why don't you reply how you got 1106,you're only replying on good comments!!!!!!
Dammit, you're too good!!!
5000*800 = 4 000 000, that is 4 000 000 not 4 00 000... Nice stuff though
ughhhhhhhhhh!!! thanks for the heads up lol didn't notice. Good that it's not as important of a part in the video. I'll try putting a note to let people know.
AllThingsMathematics
No problem man. Anyway, I've subscribed to your channel, your work is beautiful. It was just a minor mistake, don't worry.