Cost of Debt

Cost of debt, abbreviated as COD, is the debt a company owes its lenders.

 

Cost of Debt Formula

\(\large{ COD = IE \; \left( 1 - TR  \right)  }\)

Where:

\(\large{ COD }\) = cost of debt

\(\large{ IE }\) = interest expense

\(\large{ TR }\) = tax rate