Cost of Debt financial definition of Cost of Debt. Cost of Debt finance term by the Free Online Dictionary.

Cost of Debt

What Does Cost of Debt Mean?

The effective rate that a company pays on its current debt; it can be measured as either before-tax or after-tax returns; however, because interest expense is deductible, the after-tax cost is seen most often. This is one part of the company's capital structure, which also includes the cost of equity.

Investopedia explains Cost of Debt

Companies use bonds, loans, and other forms of debt for capital; this measure is useful because it indicates the overall rate being
used for debt financing. It also gives investors an idea of how risky a company can be; riskier companies generally have a higher cost of debt. To get the after-tax rate, multiply the before-tax rate by 1 minus the marginal tax rate (before-tax rate × (1 - marginal tax)). For example, if a company's only debt was a single bond in which it paid 5%, the before-tax cost of debt would be 5%. If, however, the company's marginal tax rate was 40%, the company's after-tax cost of debt would be only 3% (5% × (1 -40%)).

Related Terms:
• Capital Structure
• Cost of Capital
• Debt Financing
• Discounted Cash Flow—DCF
• Interest Rate

Mentioned in	?		References in periodicals archive	?		Financial browser	?		Full browser	?
capital structure Cost of Capital Pecking-Order View	Examples of specific topics include product differentiation and the measurement of cost efficiency in the case of Portuguese banks, an overview of asset clauses in Islamic investment, corporate governance and the cost of debt, application of dynamic rankings to portfolio selection, and evidence from the Istanbul Stock Exchange on the effect of increased liquidity on the returns of small-cap equities. New developments in financial modelling by Reference & Research Book News The primary surplus, excluding the cost of debt servicing, for the first eight months of this year recorded a surplus of LL975 billion (or 59. Lebanon's budget deficit reaches 24 percent in first eight months by The Daily Star (Beirut, Lebanon) The primary surplus, excluding the cost of debt servicing, for the first eight months of this year recorded a surplus of LL975 billion ( or 59. Total budget deficit up to August reaches 24.47 percent Spending on ... by National News Agency Lebanon (NNA)	Correspondent Correspondent Bank Correspondent Lender Correspondente bancario Corretor de cambio Correzione Corrida bancaria Corso lettera Corte de cupon Corte de cupon y su venta individual cosigner Cost Cost Accounting cost allocation depreciation Cost and Freight cost approach cost basis Cost Center Cost Company Arrangement Cost Depletion Cost Hierarchy Cost Insurance and Freight Cost Method of Inventory Valuation Cost of Capital Cost of Carry Cost of Debt Cost of Equity Cost of Funds cost of funds index Cost of Goods Sold Cost of Lease Financing Cost of limited partner capital Cost of Living Cost of Maintaining a Home Cost of Tender Cost or Market, Whichever is Lower Cost per Click Cost per Thousand Cost Records cost recovery Cost Recovery Period Cost Synergy cost to cure Cost, Insurance and Freight cost-benefit analysis Cost-Benefit Ratio Cost-of-carry market cost-of-living adjustment cost-of-living index Cost-of-Savings Index Cost-Plus Contract	Cost of Acquisition Cost of Alternative Military Program Cost of Assumption Error Cost of attendance Cost of Available Seat-Kilometer Cost of Base Realignment Actions Cost of Being Muslim Cost of Billing Cost of Borrowing Cost Of Business cost of capital cost of capital cost of capital Cost of Care in Atrial Fibrillation Cost of carry Cost of Community Services cost of commutation cost of completion Cost of Conformance Cost of Conserved Energy cost of construction cost of conveyance Cost of Corrective Replacement Cost of Cracking Adjustment Cost of Customer Acquisition Cost of Death Cost of Debt Cost of Deposit Index Cost Of Doing Business Cost of Doing Business Factor Cost of Doing Business Survey Cost of Doing Nothing Differently Cost of Education Committee Cost of Electricity Cost of Energy Cost of equity Cost of equity Cost of Facilities Cost of failure Cost of failure Cost of failure Cost of failure Cost of failure Cost of Financial Distress Cost of Freight Cost of Fulfilling User Requests Cost of funds Cost of funds Cost of Funds Index Cost of Funds Index Cost of Gain Cost Of Goods Cost Of Goods Manufactured Cost of Goods Produced and Purchased Cost of goods sold Cost of goods sold Cost of Government Day

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capital structure
Cost of Capital
Pecking-Order View

Examples of specific topics include product differentiation and the measurement of cost efficiency in the case of Portuguese banks, an overview of asset clauses in Islamic investment, corporate governance and the cost of debt, application of dynamic rankings to portfolio selection, and evidence from the Istanbul Stock Exchange on the effect of increased liquidity on the returns of small-cap equities.

New developments in financial modelling by Reference & Research Book News

The primary surplus, excluding the cost of debt servicing, for the first eight months of this year recorded a surplus of LL975 billion (or 59.

Lebanon's budget deficit reaches 24 percent in first eight months by The Daily Star (Beirut, Lebanon)

The primary surplus, excluding the cost of debt servicing, for the first eight months of this year recorded a surplus of LL975 billion ( or 59.

Total budget deficit up to August reaches 24.47 percent Spending on ... by National News Agency Lebanon (NNA)

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