Finance / July 19, 2018 / Alianna Dominguez
Discount refers to the condition of the price of a bond that is lower than the face value. The discount equals the difference between the price paid for and it’s par value. Discount is a kind of reduction or deduction in the cost price of a product. It is mostly used in consumer transactions, where people are provided with discounts on various products.
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.
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