Finance / July 15, 2018 / Emmalynn Leach
Cost of debt generally refers to the effective paid by a company on its debts. The cost of debt can be calculated in either before or after tax returns. However, the interest expense being deductible, the after tax cost is considered very often. Moreover, the cost of debt is one part of capital structure of the company and also includes the cost of equity.
Because every bond and bond fund has a duration, those numbers can be a useful tool that you and your financial professional can use to compare bonds and bond funds as you construct and adjust your investment portfolio.
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