what is the cost of debt 
the cost of debt is the total interest expense owed on a debt put simply the cost of debt is the effective interest rate or the total amount of interest that a company or individual owes on any liabilities such as bonds and loans this expense can refer to either the before tax or after tax cost of debt the degree of the cost of debt depends entirely on the borrower s creditworthiness so higher costs mean the borrower is considered risky investopedia julie bang