Finance / July 19, 2018 / Andi Barnett
The cost of debt is the monetary price of servicing the interest and principal payments of obligations used to raise capital for a company. In other words, it’s the price companies pay to acquire and keep debt.
The simplest way to value a business might be to look at its balance sheet. This is a list of the business’s assets and liabilities, showing the company’s net worth. Depending on the business, the balance sheet might show tangible and intangible assets and a variety of long-term liabilities, some of which you might be able to reduce through negotiations and invoking early-termination agreements. If it’s a complex balance sheet, you can simply take the assets you think you can sell quickly and subtract the liabilities to determine the company’s net worth for a fast sale.
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