Negative Cost of Debt?
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.
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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