Finance / CALCULATOR

After-Tax Cost of Debt

After-Tax Cost of Debt: a supplied-input model with explicit assumptions and a worked example.

Runs on your deviceUpdates as you typeFormula & example ↓
01

Your inputs

Adjust the values to explore a different result.

%
Enter pretax debt cost in %.
%
Enter applicable marginal tax rate in %.

Formula

after-tax cost=debt cost × (1−tax rate).
  • Use the units shown beside each field.
  • Results update automatically whenever you change an input.
  • Displayed values use up to four decimal places, or scientific notation for very small or large numbers. Calculations use standard floating-point arithmetic; exact integer and fraction tools identify their own precision rules.
  • Assumes interest is fully deductible and the tax shield can be used. Enter the applicable rate; no tax law is encoded.

Example Calculation

Example inputs
  • Pretax debt cost: 8 %
  • Applicable marginal tax rate: 25 %

Pretax debt cost = 8 %; Applicable marginal tax rate = 25 %. The primary result is 6.

Frequently asked questions

How do I use this calculator?

Enter pretax debt cost, applicable marginal tax rate. The result updates automatically. Use Reset to restore the example values.

What method does it use?

after-tax cost=debt cost × (1−tax rate).. Assumes interest is fully deductible and the tax shield can be used. Enter the applicable rate; no tax law is encoded.

Why might a rounded result differ?

The calculation keeps full numeric precision internally, then rounds the displayed result. Rounding intermediate steps by hand can produce a slightly different answer.

Are my inputs saved online?

No. This calculator processes your inputs in your browser. A recently used list stores only calculator names on this device, not your entered values.

Check the assumptions and units before using this result. Read about calculation methods.