hello!
out of sudden, it flashed across my mind..

do we usually use interest rate for cost of debt?

so let's say if we had 2 types of debt, one had interest rate of 10%, the other one of 20%..

then we sum up those two interest rates for cost of debt?

haha thanks !

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Yes, you would use the interest rate on your debt as cost of debt, since this is the return which debtholders expect from lending funds.

If you have a number of debt facilities on your books, you would typically use the blended interest rate as your cost of debt.

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You don't sum them up. Your cost of debt is not 30%, you might take the average of the two, so 15% if they both have equal amounts of debt outstanding

Actually, in technical terms, you should calculate the compound average of the 2 debt lines. So: Cost of debt = Interest rate A x (Debt A / Total Debt) + Interest rate B x (Debt B / Total Debt)

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