Question

The cost of debt is same as the rate of interest

True/False​

Answer 1

Answer:

true

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Answer 2

Answer:

false

Explanation:

This is the company's average interest rate on all of its debt. The after-tax cost of debt formula is the average interest rate multiplied by (1 - tax rate). For example, say a company has a $1 million loan with a 5% interest rate and a $200,000 loan with a 6% rate.