Interest Rate Guides

While interest rates represent interest income to the lender, they constitute a cost of debt to the borrower. Companies weigh the cost of borrowing against the cost of equity, such as dividend payments, to determine which source of funding will be the least expensive. Since most companies fund their capital by either taking on debt …

Borrower’s Cost of Debt Read More »

The interest rate charged by banks is determined by a number of factors, such as the state of the economy. A country’s central bank sets the interest rate, which each bank use to determine the APR range they offer. When the central bank sets interest rates at a high level, the cost of debt rises. …

Interest Rate Drivers Read More »