Ignoring taxes, if a firm issues debt at par, then the cost of debt is equal to its coupon rate.

Name: Ignoring taxes, if a firm issues debt at par, then the cost of debt is equal to its coupon rate.
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When a firm issues debt at par value, the interest rate it pays (coupon rate) is exactly equal to the cost of debt, because the firm is borrowing money at the exact rate it promises to pay to the bondholders, without any discount or premium affecting the effective interest cost.

Ignoring Taxes, If a Firm Issues Debt at Par, Then