Net interest cost
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Net interest cost (NIC)
The total amount of interest that will be paid on a debt obligation by a corporate or municipal bond issuer.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Net Interest Cost
The cost of capital for a bond issuer; that is, a calculation of how much an issuer will spend in interest on one of its bonds. The way the net interest cost is calculated involves the average interest rate weighted for the time to maturity. One increases or decreases the net interest cost according to various discounts or premiums that the issuer allows or is paid. Critics contend that calculating the net interest cost is less accurate than the total interest cost.
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