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Cost of debt is the original cost of borrowing including original interest rate

Marginal cost of debt is new loan which extended from the previous one, the interest of which is called marginal cost of debt.

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12y ago

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What is after cost of debt?

The after-tax cost of debt is predominantly based on marginal pretax costs, as well as marginal or statutory tax rates.


If a company's debt is low does marginal cost of capital apply?

Weighted average cost of capital includes cost of debt and cost of equity. Thus irrespective of existing proportion of debt and equity, the marginal cost is always applicable.


Conceptual difference between marginal cost of capital and weighted average cost of capital?

WACC is the total average cost of capital to company which is calculated by taking into account the weights of all type of capital existed at a particular date in the capital structure of the company (Equity, Debt, bonds, debentures etc). while the MCC is the incremental cost of capital which comes into existence when fresh capital is raised. It will depend on the type of capital raised, its weight and its cost.


What is the fine line difference between commercial debt and consumer debt?

Consumer debt is governed by the FDCPA....commercial debt is not.


What is difference between loan and debt?

loan is money borrowed and debt is money owed. :-)


Cost of equity 16 before tax cost of debt 13 marginal tax rate 40 stock sells at book value what is the after tax weighted average cost of capital?

I have just started taking finance class in college. I found the formula to this equation on wikipedia. Did i win anything? After tax cost of debt formula before tax rate x (1 - marginal tax) Therefore: 13% x (1 - 40%) = .078 > 7.8%


What is the difference between cost of debt and cost of equity?

Cost of Debt: when company borrow funds from outside or take debt from financial institutions or other resources the interest paid on that amount is called cost of debt.Cost of Equity: Similarly when firm raise money from already shareholders by issuing more shares to them or shares to new share holders then the dividend (interest) paid to them is called cost of equity.


The cost of debt is determined by taking the?

The estimated yield on new bond issues of the same risk times one minus the shareholder marginal tax rate.


What is the difference between debt and loan?

A debt is something you owe someone, a loan is something you borrow


What is the difference between debt settlement vs bankruptcy?

There is a subtle difference between debt settlement and bankruptcy. Debt settlement allows a person to pay off some of their debt with their creditors. Bankruptcy claims do not result in payment of the debt. Either practice creates bad credit scores for the consumer.


Difference between debt settlement and negotiation?

No difference, 2 different words for the same thing.


What is the difference between the cost of equity and the cost of debt in terms of determining the overall cost of capital for a company?

The cost of equity is the return required by investors for owning a company's stock, while the cost of debt is the interest rate a company pays on its borrowed funds. The overall cost of capital for a company is determined by combining these two costs, with the cost of equity typically higher due to the higher risk involved.