Why is the relevant cost of debt the interest rate on new debt, not that on already

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Why is the relevant cost of debt the interest rate on new debt, not that on already outstanding, or old, debt?

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Fundamentals Of Financial Management

ISBN: 9780357517574

16th Edition

Authors: Eugene F. Brigham, Joel F. Houston

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Question Posted: Feb 26, 2024 10:01 AM

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Why is the relevant cost of debt the interest rate on new debt, not that on already

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The relevant cost of debt is typically considered to be the interest rate on new debt rather than that on already outstanding or old debt due to sever...View the full answer

Fundamentals Of Financial Management

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