Valuation analysis - Cost of debt

Sou-So's picture
Rank: Senior Chimp | banana points 25

Hello,
As part of a project, I have to do a valuation analysis of a company, Tesla.
It's a first for me so I got lost on something surely simple but that I can't get to find.
I am currently looking for the cost of debt of the company. According to my book, I should find somewhere something like the file attached.
(It's a bond table with the coupon rate, book value, percentage of total debt, market value, percentage of total, YTM, book values and market values)

I looked up on the 10k report from the SEC but I didn't see it. Did I just miss it or am I looking in the wrong place?

Thank you

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Comments (11)

Mar 7, 2017

http:// www. gurufocus. com /term/wacc/TSLA/Weighted-Average-Cost-Of-Capital-WACC/Tesla-Motors-Inc

Mar 7, 2017

Thank you for your answer!
I found that earlier already but I need for my project to do it from scratch and find the data who leads to this result, show where I found the data and show my own calculations. I sadly simply use the result from there :(

Mar 7, 2017

Damodoran did a bunch of valuation stuff on tesla on his blog. Check it out.

    • 1
Mar 7, 2017

I simply posted to like to show the formulas:

Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.

Mar 7, 2017

Thank you both for your responses, they were highly useful :)

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Mar 7, 2017

Market value.

Mar 7, 2017
inkybinky:

Market value.

if you're just looking to value as a comp etc..

but if you're going to buy this beast you'll be trying to ascertain how much you're going to have to spend to buy it, so you'd need to decide how you're going to buy it (out of bankruptcy or not) and as a result if you'll have to pay contracted amounts (e.g. your 101 call price) or its sale price out of bankruptcy.

Mar 7, 2017

So it's not black and white. . Market value for comps (whats the rationale?) and refinancing cost for buyout analysis?

Mar 7, 2017
musto430:

So it's not black and white. . Market value for comps (whats the rationale?) and refinancing cost for buyout analysis?

because the price of the debt has decreased due to the perception that the business is valued at that level, and hence, when you're looking for comps this works for your purpose (finding the value of peers). but if you actually have to buy it, then things, as you will find out if you work in finance, get a lot more complex and nuanced as actual money changes hands.

Mar 7, 2017