cost-of-debt

    $
    $
    %

    Formula

    After-tax Cost = (Interest / Debt) × (1 - Tax Rate)

    Effective cost of borrowing after tax deduction.

    Examples

    $50k interest, $500k debt, 25% tax

    After-tax cost = 7.5%.

    Frequently Asked Questions

    About cost-of-debt

    Calculate the after-tax cost of debt financing.