Excellent lecture! Sabi, could you please explain the comment below, as it is also not clear to me - why we do not use as cost of debt the interests we are paying from bonds (5,2% instead of general bond rating)?
If the cost of debt is "effective rate that a company pays on its debt" how is it 4.9% when the bonds interest rate is 5.2% shouldn't the cost of debt be 5.2%?
I just wanna say thank you for your efforts. Tks alot. Great job
Excellent lecture! Sabi, could you please explain the comment below, as it is also not clear to me - why we do not use as cost of debt the interests we are paying from bonds (5,2% instead of general bond rating)?
VERY GOOD!!
If the cost of debt is "effective rate that a company pays on its debt" how is it 4.9% when the bonds interest rate is 5.2% shouldn't the cost of debt be 5.2%?
Hi mam, is the nominal value of bond always assumed to be 100?
While calculating cost of debt you didn't deduct tax rate from it. Why?