Interest is deductible, so the true cost of borrowing to the firm is t…

Question

Interest is deductible, so the true cost of borrowing to the firm is the:

Accepted Answer

C. After-tax cost

1. Tax relief lowers the burden.
2. The stated rate overstates the cost.
3. It is the after-tax cost of debt.
_Source: OpenStax Principles of Finance 2e, Chapter 17, How Firms Raise Capital._

Answer

Retail cost

Answer

Historic cost

Answer

Before-tax cost

Interest is deductible, so the true cost of borrowing to the firm is the:

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