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Synthetic Rating & Cost of Debt
  • Synthetic Rating & Cost of Debt
  • Synthetic Rating & Cost of Debt
Originally published: 20/06/2016 14:00
Publication number: ELQ-43978-1
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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

Prof. Aswath Damodaranby Prof. Aswath Damodaran
Professor at NYU Stern School of BusinessFollow 1,096
NYU Stern School of Businesswith NYU Stern School of Business
An Education in PossibleFollow 64
9 reviews2,004 views|Start the discussion!|Bookmark download for free
financesynthetic ratingcost of debtinterestcoverage 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

This Best Practice includes
1 Excel Model File

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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)

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