Three cost components to consider when calculating the cost of debt:
1. The borrowing cost: explicit interest rate paid on the debt2. Flotation costs: transaction fees for obtaining the debt3. Taxes: lower borrowing costs by creating a tax shield
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Three cost components to consider when calculating the cost of debt:
1. The borrowing cost: explicit interest rate paid on the debt2. Flotation costs: transaction fees for obtaining the debt3. Taxes: lower borrowing costs by creating a tax shield