alleryStart learning →A firm's cost of debt is described as the interest rate it would have to pay to do what with its existing debt?
AFreeze it
BRefinance it
CForgive it
DForget it
Answer & Solution
Correct answer: B. Refinance it
1. Today's rate is what matters.
2. The old debt would be replaced.
3. It would refinance it.
_Source: OpenStax Principles of Finance 2e, Chapter 17, How Firms Raise Capital._
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