Negative Cost of Debt
I'm sorry for asking a foolish question,
Right now I am working on my thesis, when I took data from Refinitiv Eikon regarding WACC Cost of Debt, I found several companies that have a negative WACC Cost of Debt. Is there an explanation that I can use to explain this condition?
Can't be negative. You can have negative net debt (low debt + high cash) but companies do not get paid to use capital.
I would guess there is some calc issue and Refinitiv is applying a broad calculation method, especially if the company has very low net debt. Cannot always rely on these data aggregators. I would use another source or calc yourself.
Must be confusing it with Net Debt, companies like Apple with high cash on hand tend to generate negative debt because the interest they pay to borrow is often less than the interest they can earn with their massive cash balance
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