How to calculate the after-tax cost of debt
Accounting Tools
JUNE 6, 2023
Related Courses Corporate Finance Financial Analysis Treasurer's Guidebook The after-tax cost of debt is the initial cost of debt , adjusted for the effects of the incremental income tax rate. To calculate it, subtract the company’s incremental tax rate from 100% and then multiply the result by the interest rate on the debt.
Let's personalize your content