After tax cost of debt formula

    • After-Tax Cost of Debt | Definition, Formula & Example

      Cost of Debt = { [(SD/TD) x (TN x AF)] + [(LD/TD) x (TB x AF)] } x [1 – TR] Where; SD = Short Term Debt. LD = Long Term Debt. TD = Total Debt. AF = Debt Adjustment Factor. TN = Avg. Rate of Treasury Notes. TB = Treasury Bond Rate. TR = Tax Rate. Example: On 12/3 (shown below) 10 year bonds were yielding 7.0161%, this is the “Pre-tax Cost L.T. Debt”

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    • [DOC File]BALANCE OF PAYMENTS

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      3.5 Cost of Debt, Rd. The nominal, pre-tax cost of debt is estimated by adding an appropriate debt risk premium to the risk free rate, determined earlier as 6.47% to 6.57%, depending on whether nominal or capital index bonds are used.

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    • [DOC File]Chapter 17: Valuation and Capital Budgeting for the ...

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      WACC = wd (cost of debt after tax) + ws (cost of stock/RE) + wp(cost of PS) EXAMPLE. Cowboy Energy Services maintains a mix of 40% debt, 10% preferred stock, and 50% common stock in its capital structure. The WACC is: WACC = 0.4(6%) + 0.1 (12.4) + 0.5(21.6) = 2.4 + 1.24 + 10.8 = 14.4 %

      after tax cost of debt calculator


    • [DOC File]Calculation of the WACC

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      Since the level of debt is known, the appropriate discount rate to use is Kendrick’s pre-tax cost of debt, 9%. After-Tax PV of Payments = $229,500A100.09 + $4,250,000 / (1.09)10 = $3,268,098. The after-tax present value of interest and principal payments is $3,268,098. Present Value of the flotation cost tax …

      before tax cost of debt


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