What is the 'Cost of Debt'?

Modified on Mon, 18 Jun, 2018 at 3:02 PM

Cost of debt refers to the effective rate a company pays on its current debt. In most cases, this phrase refers to after-tax cost of debt, but it also means the company's cost of debt before taking taxes into account. The difference in cost of debt before and after taxes lies in the fact that interest expenses are deductible.


Source : Investopedia

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