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July 29, 2014

Homework Help: Corporate Finance

Posted by ASW on Sunday, December 24, 2006 at 12:13pm.

Based on the current fianancial statements total liabilitie are 8 million and interest expensed for the coming year is 1 million. What is the cost of debt?

Assuming "liabilities" are all debt, which is usually the case, then
(1 million interest)/(8 million debt)= 12.5%

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