The ________ is the return that the bank or bondholder demands on new borrowing.

Question

Quizplus · Accepted Answer

The cost of debt is the return that the bank or bondholder demands on new borrowing. IRR (Internal Rate of Return) and WACC (Weighted Average Cost of Capital) are broader concepts that take into account both debt and equity costs, while the Cost of Equity is specifically related to the return that shareholders demand on the company's stock.

The ________ Is the Return That the Bank or Bondholder