Cost of Debt


Definition: Cost of Debt is the effective rate that a company pays on its total current debt.
Debt typically includes corporate bonds, loans and other special forms of debt.
COD can be expressed and measured in either before- or after-tax returns. Interest expenses are deductible, so after-tax cost is prefered most of the times.
COD is one of the main components of a firm's capital structure or cost of capital, as are also the cost of equity and cost of prefered stock.



More on cost of debt.
More on investing: Alternative Investments, Asset Management, Break-even Point, BRIC Countries, Capital Structure, more...


MBA Brief offers brief, yet very accurate definitions of MBA concepts, frameworks, methods and models. We keep it short and provide some links in case you'd like to learn more around a subject.

© 2020 MBA Brief - Last updated: 30-9-2020  -  Privacy   |   Terms