What would be the effective cost of debt if bank loan is taken… L3 candidates plz help with ur inputs
Clarify “if bank loan is taken”. Who is taking the loan? What are the details of the loan?
If a corporation taken bank loan what will be the cost of debt for this firm provided there is no securitization activity/factoring in the country in question
the cost of debt is the interest paid on the loan.
Yes, cost of debt is interest paid on the loan. I guess, what you mean by “effective” cost of debt is interest (D) after tax (t), so that effective cost opf debt is: D (1-t).
Robb, you were close. Answer was B.