Solved: Why cost of debt calculated as after-tax cost, Finance Basics

Why cost of debt calculated as after-tax cost

Question 1: In the weighted cost-of-capital, why is the cost of debt always calculated as an after-tax cost, or debt percent * (1-tax rate)?

Question 2: Briefly explain how the discount rate, or the cost-of-capital, be used to represent the risk associated with a particular investment opportunity?

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Finance Basics: Why cost of debt calculated as after-tax cost

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Finance Basics: Why cost of debt calculated as after-tax cost

Reference No:- TGS02043356

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