# Calculate the after-tax cost of debt

Calculate the after-tax cost of debt under each of the following conditions;

A. Interest rate, 13 percent; tax rate, 0 percent

B. Interest rate, 13 percent; tax rate, 20 percent

C. Interest rate, 13 percent; tax rate, 35 percent.

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#### Solution Preview

Theory:

After tax cost of debt = Interest rate*(1-Tax rate)

a) ...

#### Solution Summary

The solution provides simple, easy to understand calculations to find after tax cost of debt for each other the conditions. One reference is provided to enhance student learning.

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