When trying to find our cost of debt, we should only be using the most recent issuances of debt. Ideally with a tending maturity We don't want out of date debt. Thus only use your income statement or balance sheet numbers as a last resort These are old, out of date debt issuances So ideally, we look for the company publicly traded debt. Use the observed market data, look at its market value and the returns on it If the company has rated debt but it's not publicly traded, then benchmark to similar debt And thus you could find the value of that and the return required Lastly if they have not rated and not traded debt, then benchmark to similar companies i.e those with similar risk profiles And use the market value of debt and risk there