The interest rate of debt (bonds, loans) after deducting the income tax savings. For example, if
a corporation has issued bonds with an interest rate of 8% and the corporation's income tax rate
is 25%, the after-tax cost of the bonds' interest is 6% (8% minus the tax savings equal to 25% of
Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years. He is the sole author of all the materials on AccountingCoach.com. Read more about the author.