This study explores the determinants of the cost of corporate debt in the Republic of Serbia. It covers 4,701 companies during 2008-2013, representing more than 90% of all medium-sized and large companies actively operating in the country. In this particular market, the cost of corporate debt is influenced by the following factors: Euribor rates, sector membership, size of a company, short-term and total leverage of a company, interest coverage ratio, the presence of the shareholder capital, ownership structure as pertaining to the state or foreign ownership, and the type of audit opinion. After accounting for these factors, the pseudo R2 yields 77%. At the same time, the type of an audit opinion is shown to be the single most important predictor of the cost of debt in the country, contributing to the pseudo R2 with approximately 2,900 basis points. Therefore, the companies operating in the Republic of Serbia seeking a more affordable cost of debt should pay special attention to the quality of their financial reports.