Band of Investment Method Investment, factor, include, interest

SkipE99

Question: Why do I have to include in the cost of debt also the sinking factor and not just the interest rate, as is done in the WACC (there I also include the tax effect)?

Many thanks.

19831985

Thecodont Wrote:
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> By the way, the sinking fund factor is to reflect
> that fact that the debt is amortizing. Everywhere
> else it is assumed to be bond debt so only int is
> paid

[ ] bad
[ ] good
[x] perfect