Cost of debt capital [LO 5) If the appropriate cost of debt capital is greater than the coupon rate of a debt security, its price will usually be less than its face value. Comment on the validity or otherwise of this statement with the aid of the following example: a 5-year debt security has a face value of $100 and a coupon rate of 10 per ceny per annum, with interest paid semi-annually. The appropriate cost of debt capital is 13 per cent per annu (effective)