Cost of debt Calculator

Written by:Abraham A.
Location:Bonds

Finance.ThinkAndDone.com provides you online and windows calculators to calculate pre tax and post tax cost of debt when you provide par value, market price, coupon rate and years till maturity

Location: Bonds

Cost of debt Calculator

Developed by:Emma A.
Location:Financial Calculators
type in the authorization code in the box located below:

Results

Pre Tax: Cost of Debt = 3.31% Annual Cost of Debt = 6.62%
After Tax: Cost of Debt = 2.32% Annual Cost of Debt = 4.64%

Input Data

Please enter the maturity value of the bond (debt) 
Please enter the market price of the bond (debt) 
Please enter the coupon rate  
Please enter the years to maturity  
Please enter the tax rate  


Instructions

To use this online calculator to calculate cost of debt kd, you need to type in information about the debt instrument such as it's maturity value, it's market price, the coupon it pays, the rate of return expected by investors and years left in maturity. Assume we have a 8% semi annual $1000 bond currently selling at $1100 with 10 years left to mature.

  • You have to type in 1000 as bond's maturity value
  • Then 1100 is pressed in as the current price of bond
  • You have to key in 8 as the coupon rate
  • Then 10 is typed in for the years till the bond matures
  • Select semi-annual compounding since the bond makes two interest payments per year
  • A click on the CALCULATE button shows the pre-tax cost of debt of 6.62% and an after tax cost of debt of 4.64%
Location: Financial Calculators