Definition
Cost of debt refers to the effective interest rate a company pays on its borrowed funds, including loans and bonds. It impacts overall capital costs and financial strategy.
Related Services
Debt advisory, corporate finance, and risk management services help companies optimize debt structures and reduce financing costs.
Problem and Application
A high cost of debt increases financial burden and reduces profitability. Businesses must manage debt efficiently to maintain financial health and investment capacity.
Conclusion
Managing cost of debt is crucial for sustainable financing. Companies should balance debt with equity financing and seek favorable interest rates to optimize capital structure.
