The cost of debt is equal to the current bond yield on bonds of similar risk class and adjusted for the corporate tax rate.

Name: The cost of debt is equal to the current bond yield on bonds of similar risk class and adjusted for the corporate tax rate.
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Question

Quizplus · Accepted Answer

The cost of debt is calculated using the current bond yield on bonds of similar risk class and adjusting for the corporate tax rate, as interest payments on debt are tax-deductible.

The Cost of Debt Is Equal to the Current Bond