Cost of debt: Difference between revisions

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The cost of debt is the effective rate that a company pays on its current debt.

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-The '''cost of debt''' the required return by an lender for a borrowed amount. For the company, it can be seen as a cost as the interest paid on the debt is categorized as an expense. It is usually noted by <math>K_d</math>.
+{{subpages}}
-The gross Cost of Debt can be computed as the total yearly amount of interest paid on the total amount borrowed.
+The '''cost of debt''' is the effective rate that a company pays on its current debt.
-As interests are deductible from the tax form, the company usually take only in account the after-tax cost of debt:
-XXXXX
-The cost of debt is one of the input for the [[WACC|Weighted Cost of Capital]] which gives the cost of the capital sources, taking into account origin of it.
-==See also==
-[[WACC|Weighted Cost of Capital]]
-[[Cost of Equity]]
-[[Category: Finance]]
-[[Category: CZ Live]]