Synthetic Rating & Cost of Debt
Originally published: 20/06/2016 14:00
Publication number: ELQ-43978-1
View all versions & Certificate
certified

Synthetic Rating & Cost of Debt

Allows you to estimate a rating and a cost of debt for your company from the firm's interest coverage ratio

Description
Inputs needed:
- type of firm
- operating lease or rental commitments
- current earnings before interest and taxes (EBIT)
- current interest expenses
- current long term government bond rate


Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (www.damodaran.com)

This Best Practice includes
1 Excel Model File

Prof. Aswath Damodaran offers you this Best Practice for free!

download for free

Add to bookmarks

Discuss

Further information

The objective of this model is to get the following output values:
- interest coverage ratio
- estimated bond rating
- estimated default spread
- estimated cost of debt


4.8 / 5 (9 votes)

please wait...