CFA Practice Question

There are 233 practice questions for this study session.

CFA Practice Question

True or False? The before-tax cost of debt capital for a firm can be observed directly even if the firm's bonds are not publicly traded.
Correct Answer: False

User Contributed Comments 2

User Comment
JepTang To evaluate the firm's average cost of debt is already difficult because it would be almost impossible to be granted access to such an information. Therefore, a firm's cost of debt for a particular project can be observed if the bond is traded in an organized exchange. However, approximating/computing the company's average cost of debt would still be difficult.
jpducros cost of debt capital = cost of debt, not cost of capital.
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