Cost of debt
The cost of debt for a firm is the rate of return required by a company's debt holders.
The cost of debt is simply the current yield on a company's debt. For any given piece of outstanding debt: <math>Cost\ of\ Debt=Annual\ Interest\ Payment / Market\ Value\ of\ Debt</math>
Related Fool Articles
Related Community Blogs
Recent Mentions on Fool.com
- This 1 Figure Could Keep the Stock Market From Reaching New Highs
- J.M. Smucker, Kraft, and Mondelez: 3 Food Companies to Watch
- Do You Have Good Debt or Bad Debt?
- Buckle, Cheesecake Factory, Dorman Products: 3 Mid-Cap Companies to Watch
- U.S. Automakers Are Coming Back to Life in Europe
- 7 Ways to Pay Down Your Mortgage More Quickly