Cost of Debt Calculator

Calculate Cost of Debt



Formula

The formula to calculate the cost of debt is:

\[ \text{CoD} = \text{IE} \times \left( 1 - \frac{\text{TR}}{100} \right) \]

Where:

Cost of Debt Definition

A cost of debt is a measure of the minimum rate of return a holder of debt must return to accept the liability.

Example Calculation

Let's assume the following values:

Using the formula:

\[ \text{CoD} = 1000 \times \left( 1 - \frac{30}{100} \right) = 700 \]

The cost of debt is $700.