If a firm is interested in the current cost of its debt obligations, then it can simply look at the contractual rate of interest due lenders on those obligations.

Question

Quizplus · Accepted Answer

The contractual rate of interest may not reflect the current market conditions or the firm's current credit risk, so the firm should consider the yield to maturity or the current market rate for a more accurate measure of the cost of debt.

If a Firm Is Interested in the Current Cost of Its