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  "documentTitle": "Bear Stearns | Investment Banking Pitch Book | 36 slides",
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  "presentationDate": "2005-01-01 00:00:00",
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  "notes": "Part of a DCF Primer deck.",
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      "kind": "list",
      "text": "There are generally three principal categories of debt which may be valued separately: Non-convertible, long-term debt; Convertible debt; Short-term debt.",
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      "text": "A company's cost of debt capital is generally calculated as a blended average of yields (weighted by market values) for all tranches of publicly traded debt and a blended average of coupons (weighted by book values) for non-traded debt.",
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      "text": "In certain sectors in which off-balance sheet financing is prevalent (i.e., retailing and airlines), it may be appropriate to include operating leases in debt since they have similar economics to capital leases. \"Capitalizing\" operating leases requires adjustments to income to exclude operating lease expense and replace it with additional interest expense and depreciation on the capitalized lease asset.",
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      "text": "In evaluating a company with a rapidly improving or deteriorating credit profile, it may be distortive to use book values as a proxy for market values.",
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      "text": "(1) The value of non-convertible debt... (2) Treat out-of-the-money... (3) Since some portion... (4) By \"capitalizing\"... (5) Depreciation expense...",
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      "text": "Calculating the Cost of Debt Capital",
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