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Goff Computer: Cost of Capital

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Answer:
Step 1:
Book Value of equity=$7,766 million
Book value of debt=$5,146 million
Book Value of debt:
January 28, 2011
(in millions)
Long-Term Debt
Notes
$400 million issued on June 10, 2009, at 3.375% due June 2012 ("2012 Notes") with interest payable June 15 and December 15 (includes impact of interest rate swap terminations) 400
$600 million issued on April 17, 2008, at 4.70% due April 2013 ("2013A Notes") with interest payable April 15 and October 15 (includes impact of interest rate swap terminations) 609
$500 million issued on September 7, 2010, at 1.40% due September 2013 ("2013B Notes") with interest payable March 10 and September 10 499
$500 million issued on April 1, 2009, at 5.625% due April 2014 ("2014 Notes") with interest payable April 15 and October 15 500
$700 million issued on September 7, 2010, at 2.30% due September 2015 ("2015 Notes") with interest payable March 10 and September 10 700
$500 million issued on April 17, 2008, at 5.65% due April 2018 ("2018 Notes") with interest payable April 15 and October 15 499
$600 million issued on June 10, 2009, at 5.875% due June 2019 ("2019 Notes") with interest payable June 15 and December 15 600
$400 million issued on April 17, 2008, at 6.50% due April 2038 ("2038 Notes") with interest payable April 15 and October 15 400
$300 million issued on September 7, 2010, at 5.40% due September 2040 ("2040 Notes") with interest payable March 10 and September 10 300

Senior Debentures
$300 million issued on April 3, 1998 at 7.10% due April 2028 with interest payable April 15 and October 15 (includes the impact of interest rate swap terminations) 389

Other
India term loan: entered into on October 15, 2009 ...

Solution Summary

This solution provides a detailed, step by step calculation of the given problem.

$2.19