### What Is the Formula for the Market Value of Debt

The formula for the market value of debt is E((1-(1/(1 + R)^Y))/R) + T/(1 + R)^Y where E is the annual interest expense R is the cost of debt T is the total debt and Y is the average maturity in years of the debt However calculating the market value of debt can be tricky because not many firms carry their debt in bond form

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