[Evan]

Okay man, you're obviously doing your homewokr here. I think we're getting too cuaght up in an irrelevant example and losing track of the real discussion. Maybe a more direct example will be better

Let's say a company has ZERO on balance sheet debt. None, nothing, interest expense is zero. But, they have a ton of operating leases. This company will have no bond rating and no publicly traded debt to quote. This does NOT mean that their cost of debt is zero. A good example of such a company is Bed Bath and Beyond (although I don't think they have zero debt, it's very very low and their operating leases are MUCH bigger).

My only point is that market quotes are not a good way to attain your cost of debt. At times they will be right, when recetn trades/issues were long ago they will not be. When companies don't have public debt they will not be. That is all I'm trying to say.