A
Glossary
After-Tax Cost of Debt
Essential — core valuation theory
What it measures
Cost of debt after the tax saving on interest. A bit lower than Kd; the version used in WACC.
Formula
Kd × (1 − tax rate)Benchmark
Typically 3-6% for investment grade
Related metrics
Source
Brealey/Myers, Principles of Corporate Finance ch. 17