WikiWealth

I'm sorry that we don't already have CDE in our list of companies, but I can still answer your question.

1. The Risk Free Rate of interest is found here: http://www.treas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml. We use the 20 year rate for all companies, because we expect to invest in those companies for the next 20 years.

2. The Market Risk Rate, which I assume is the Market Risk Premium or Equity Risk Premium (definition) is 5% for all companies that we follow. This is the premium over the risk free rate that investors need in order to purchase equity investments. Academic research supports the 5% premium.

Write back any questions. Thank you

Great questions.

1. In a narrow sense, you can assume the 6.5% yield is the cost of debt for that subject company. You need to know the cost of all the other debt that your company owns in order to understand the average cost of debt for that company. In the next update to the site, we will introduce an implied cost of debt, which is the net interest expenses / total interest bearing debt.

WikiWealth differs in their approach to the cost of debt, because we take an industry average cost of debt and assume that each company will gravitate towards that optimal cost of debt over the long term. We make assumptions for 20 yr time periods. Individual measurements of cost can change over the short time, so we don't rely on them.

2. If we understand correctly, net borrowing is just the difference between what you borrowed and what you lent. We may need more information to understand your question.

Good luck. WikiWealth