Cost of debt: Difference between revisions

Latest revision as of 20:10, 19 January 2010

Citable Version ^[?]

This editable Main Article is under development and subject to a disclaimer.

[edit intro]

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

@@ Line 1: / Line 1: @@
-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]]