Thursday, May 6th, 2010

How can I find risk free rate, market return, and interest paid on debt?

risk debt
Darya asked:


I’m doing a finance project for Coach, Inc. (COH) and I have to calculate cost of equity, cost of debt, and I really don’t know where to look for the risk-free rate, market return, and interest paid on debt for this company. Any help will be appreciated.

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2 Responses to “How can I find risk free rate, market return, and interest paid on debt?”

A M Says:
May 9th, 2010 at 4:57 am

Risk free rate normally refers to three-month Treasury bill rate (T-bill).

Market Return is often the S&P 500 return.

Interest paid on debt is in the Net Income Statement.

beancounter2_1999 Says:
May 10th, 2010 at 12:37 am

The long term risk free rate is the government 10-year bond rate, you can find it on yahoo finance. 4.62%

The market return is just the risk-free rate + a premium. 5.5-6%.

The cost of debt, is your interest expense divided by your total debt. That should give you a percentage number.

Good luck!

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