Which three of the following factors have the greatest effects on the cost of debt?

Question

Quizplus · Accepted Answer

A) The benefit derived from interest being tax deductible reduces the net cost of debt for the borrower, making it an important factor in determining the cost of debt.
B) The prevailing interest rates directly affect the cost of borrowing; the higher the interest rates, the higher the cost of debt.
D) The risk of default and expected rate of recovery of money lent in the event of default can significantly increase the cost of debt for the borrower, as lenders may require a higher interest rate to compensate for the higher risk.

Which Three of the Following Factors Have the Greatest Effects