54
Toconvertthebookvalueofdebttomarketvalue,weusethe
pretaxcostofdebtforDisneyof5.25%asthediscountrate,
$13,100millionasthebookvalueofdebt,and thecurrent
year’s interest expenses of $666 million as the coupon:
To this amount, we add the present value of Disney’s
operatingleasecommitments.Thispresentvalueiscomputed
bydiscountingtheleasecommitmenteachyearatthepretax
cost of debt for Disney (5.25%):
55
Year
Commitment
($millions)
Present Value
($millions)
1 271.00 257.48
2 242.00 218.46
3 221.00 189.55
4 208.00 169.50
5 275.00 212.92