TY  - JOUR 
TI  - Which cost of debt should be used in forecasting cash flows?
JO  - Estudios Gerenciales, Vol. 25 No. 111
PB  - Universidad Icesi
PY  - 2009
issn 01235923
AB  - Frequently, analysts and teachers 
use the capitalized rate of interest 
for the cost of debt when forecasting 
and discounting cash flows. Others 
estimate the interest payments 
when forecasting annual financial 
statements or cash flows based on 
the average of debt calculated with 
the beginning and ending balance. 
Others use the end of year convention 
that calculates the yearly interest 
multiplying the beginning balance 
times its contractual cost. The use 
of one or other methods is critical for the definition of the tax savings. 
These approaches are illustrated 
with examples and the differences 
in using them. A simple proposal to 
solve the problem is presented.
KW  - Costos
KW  - Deuda
KW  - Proyección financiera
KW  - Estados Financieros
KW  - Cost of DEBT
KW  - Forecasting financial
UR  - http://www.icesi.edu.co/revistas/index.php/estudios_gerenciales/article/view/304
ER  -