Describe why it is not usually appropriate to use the coupon rate on a firms bonds to estimate the pretax cost of debt for the firm ...

The pretax cost of debt for the firm is the current annual eco ...

Describe why it is not usually appropriate to use the coupon rate on a firms bonds to

Question:

Describe why it is not usually appropriate to use the rate on a firm’s bonds to estimate the pretax for the firm.

Cost Of Debt
The cost of debt is the effective interest rate a company pays on its debts. It’s the cost of debt, such as bonds and loans, among others. The cost of debt often refers to before-tax cost of debt, which is the company's cost of debt before taking... Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...