$326,000,000 starting face value of loan (it increases each 1/2 year)
-$312,000,000 cash on hand
=$ 14,000,000 net debt
Interest on $14,000,000 net debt is about $350,000 per quarter, about the same as 1Q98, or 1 cent/share.
Gary,
Ty very much for your excellent posts re Amzn's interest payments analysis; based on our discussions, the followings are some adjustments and calculations:
The loan amount - $326MM at 10% interst rate = $32MM interest expense annually; approx. $8MM interest expense per quarter.
$8MM divided by Approx 24M outstanding number of shares = 30 cents per share per quarter; and $1.20 per share for the first year.
Amzn's cash on hand of $312 MM, which is financed by the debt for the on-going operations should generate an average of less than 5% return on a declining base amount (cash in the bank at 3%; s-t to mid-term instruments at 5%). Approx 13 cents of interest income for the first quarter(50 cents for the first year) maybe expected to offset some of the interest expenses. |
