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Debt Issued at Premium or Discount

Debt Issued at Premium or Discount:

If the debt is issued at premium or discount, the cost of debt is calculated with the help of the following formula.

Kd = I / Np (1 – t)

finance
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Where,

Kd = Cost of debt capital

I = Annual interest payable

Np = Net proceeds of debenture

t = Tax rate

Debt Issued at Premium or Discount Debt Issued at Premium or Discount Reviewed by Ikpokolo Francis on Wednesday, May 03, 2017 Rating: 5

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