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    The Cost of Debt

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    How is the cost of debt determined? Does the cost of debt differ if the company is privately traded as opposed to publicly traded? How do you estimate debt for companies that are privately held?

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    The cost of debt for a company can be determined by the interest rate (Ross, Westerfield, & Jaffe, 2010). This is calculated as an after-tax cost of debt to the company (Ross, Westerfield, & Jaffe, 2010). U.S. News and World Report give real good examples of this, proving that the cost of debt can be really expensive (Your Money, 2012).

    If the company is privately ...

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    How is the cost of debt determined? Does the cost of debt differ if the company is privately traded as opposed to publicly traded? How do you estimate debt for companies that are privately held?

    $2.19

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