what is cost of debt capital
From Wikipedia, the free encyclopedia. In economics and accounting, the cost of capital is the cost of a company's funds (both debt and equity), or, from an investor's point of view the required rate of return on a portfolio company's existing securities.It is used to evaluate new projects of a company.ince in most cases debt expense is a deductible expense, the cost of debt is computed as an after tax cost to make it comparable with the cost of equity (earnings are tax as well). Thus, for profitable firms, debt is discounted by the tax rate.