I am currently in the in the midst of developing a DCF model for a company with a relatively large amount of outstanding bonds. I don’t have access to any institutional level software applications like Capital IQ or Bloomberg. How would I go about consolidating the YTM on all the corporations current bonds outstanding in order to obtain the Cost of Debt for my WACC input?
If most of the debt is long term then I think you wil be OK using the book value since that will be your actual interest rate for your forecast period. Also, if you bought 100% of the company today you would be paying back the book value and not the market value of the debt.