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True interest cost

   Also found in: Acronyms 0.02 sec.
True interest cost
For a security such as commercial paper that is sold on a discount basis, true interest cost is the coupon rate required to provide an identical return assuming a coupon-bearing instrument of like maturity that pays interest in arrears.


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8 million in taxable bonds, with all "AAA" rated (a Moodys Investors Service rating) bonds possessing a final maturity date of 2038 and a true interest cost of 5.
The bid was awarded on the basis of the true interest cost (almost 4.
This can happen if the earnings of the fund over the life of the pension bonds are less than the true interest cost on the bonds.
 
 
 
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