Before-tax cost of debt

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Before-tax cost of debt, rd, is the interest rate the firm must pay on new debt.

Definitions

According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),

Before-tax cost of debt, rd. The interest rate the firm must pay on new debt.

Related concepts

Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.

Related lectures

Introduction to Financial Management.

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