The determine cost of debt for a company, the difference debt is privately placed to being publicly traded and reasons on estimating cost of debt whose debt issues are privately held. Introduction: The cost of debt is the effective interest rate of cost which a business earns on their current debts. Debt involves in the formation of capital structure. As the debt is considered as a deduction expenditure, the cost of debt is usually determined as after-tax cost in order to formulate similar to the cost of equity .

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Chapter 13, Problem 5CQ

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To determine: The determine cost of debt for a company, the difference debt is privately placed to being publicly traded and reasons on estimating cost of debt whose debt issues are privately held.

Introduction:

The cost of debt is the effective interest rate of cost which a business earns on their current debts. Debt involves in the formation of capital structure. As the debt is considered as a deduction expenditure, the cost of debt is usually determined as after-tax cost in order to formulate similar to the cost of equity.

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