COST OF DEBT Definition

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COST OF DEBT is interest rate times 1 minus the marginal tax rate (because interest is a tax deduction). An increase in the tax rate decreases the cost of debt.

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RESERVE ACCOUNTS, generally, are those accounts where retained earnings are set aside to satisfy dividends, improvements, contingencies, retirement of preferred stock, etc.

LOCKED QUOTATION is a temporary condition, normally associated with fast-moving, active markets, where the ask price of one Market Maker in a given security is the same or lower than the bid price of another Market Maker, thereby producing locked or crossed quotations, respectively. Trading continues to occur. Also known as a CROSSED QUOTATION.

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