Calculate the market value of each bond issue by multiplying

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You work in Walt Disney Company’s corporate finance and treasury department and have been assigned to the team estimating Disney’s WACC. You must estimate this WACC in preparation for a team meeting later today. You quickly realize that the information you need is readily available online.

1. You now have the price for each bond issue, but you need to know the size of the issue. Returning to the Web page, go to the row of the bond you chose and click the Issuer Name in the first column (this will either be Walt Disney Company or ABC or another subsidiary). This brings up a Web page with all of the information about the bond issue. Scroll down until you find “Amount Outstanding” on the right side. Noting that this amount is quoted in thousands of dollars (e.g., $60,000 means ), record the issue amount in the appropriate row of your spreadsheet. Repeat this step for all of the bond issues.

2. The price for each bond issue in your spreadsheet is reported as a percentage of the bond’s par value. For example, 104.50 means that the bond issue is trading at 104.5% of its par value. You can calculate the market value of each bond issue by multiplying the amount outstanding by Do so for each issue and then calculate the total of all the bond issues. This is the market value of Disney’s debt.

3. Compute the weights for Disney’s equity and debt based on the market value of equity and Disney’s market value of debt, computed in step 5.

Reference no: EM132044440

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