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Cost of debt

Created by Arthur Aslanyan (Nafta College), last modified on Sep 15, 2018

Interest rate on the cash loans:

$\begin{array}{l}\displaystyle K_D = (R_f + R_p)(1-T)\end{array}$

where

$\begin{array}{l}R_f\end{array}$	risk-free bond
$\begin{array}{l}R_p\end{array}$	risk premium
T	income tax

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