Dear WSO,
I am writing my thesis, a valuation of a European retail company. Since the company debt is publicly-traded, I'm assuming that the cost of debt equals the yield to maturity (YTM) of outstanding bonds. However, all outstanding bonds have negative YTM which results in a negative cost of debt.
Does this make sense? Can the cost of debt be negative?
Thank you for your time.
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When there is deflation or when it costs money to put money into bonds?
Thanks for your reply.
I understand that, but does it make sense to then say: Company X has a negative cost of debt?
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