| # | Instrument | Principal | Base rate % | Spread bps | Nominal % | Fees %/yr | Compounding | Deductible | Custom weight % | EAR % | After-tax % | Action |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Totals | 0 | — | — | — | — | 100 | — | — | ||||
Nominal = base + spread/100. EAR includes fees and compounding.
Example data table
| Instrument | Principal | Base % | Spread bps | Fees % | Compounding | Deductible |
|---|---|---|---|---|---|---|
| Term Loan A | 2,000,000 | 5.25 | 150 | 0.20 | 4 | Yes |
| Senior Notes | 3,500,000 | 7.10 | 0 | 0.00 | 2 | Yes |
| Revolver | 1,200,000 | 4.80 | 225 | 0.30 | 12 | Yes |
Click “Load Example” to populate the calculator with these values.
Weighted contributions by instrument
| # | Instrument | Weight % | EAR % | After-tax % | Contribution (pre-tax, pp) | Contribution (after-tax, pp) |
|---|---|---|---|---|---|---|
| Totals | — | — | ||||
“pp” denotes percentage points of WACD attributable to each instrument.
Tax shield impact summary
Estimated annual interest expense
—
Estimated annual tax shield benefit
—
After-tax interest outflow
—
Deductible share of interest
Estimates use EAR and principals: expense ≈ Σ principal·EAR; shield ≈ Σ principal·EAR·T for deductible items.
Sensitivity: ±100 bps on base rates
| Scenario | Pre-tax WACD | After-tax WACD |
|---|---|---|
| −100 bps | — | — |
| Current | — | — |
| +100 bps | — | — |
Sensitivity applies a uniform ±1.00 percentage point to nominal rates as a proxy for base-rate shifts.
Results
Pre-tax WACD (EAR)—
After-tax WACD—
Weighted nominal rate—
Weighted EAR—
Formula used
- Nominal rate: rnom,i = basei + spreadi/100.
- Effective annual rate: EARi = (1 + (rnom,i + feesi)/mi)mi − 1.
- Weights: wi = principali / Σ principal, or custom weights (%).
- Pre-tax WACD: Σ [ wi · EARi ].
- After-tax WACD: Σ [ wi · EARi · (1 − T · deducti) ].
T is the corporate tax rate as a decimal; deducti is 1 if tax-deductible, else 0.
How to use
- Enter the corporate tax rate.
- Add instruments and fill principal, base rate, and spread.
- Optionally add annual fees and choose compounding frequency.
- Toggle deductibility where interest isn’t tax-deductible.
- Choose custom weights if not weighting by principals.
- Press Calculate to update WACD and summaries.
- Export your table and results to CSV or PDF.
FAQs
Should I weight by book or market values?
Market values better reflect current pricing. If unavailable, use outstanding principal as a practical proxy.
Do fees belong in the cost of debt?
Recurring annual fees are included here. One-time upfront fees are excluded unless annualized appropriately.
How are floating rates handled?
Input today’s base rate and the contractual spread in bps; the tool sums them into the nominal rate.
What if some instruments are not tax-deductible?
Uncheck Deductible for those rows; their after-tax multiplier becomes 1.0.
Why does after-tax WACD change with T?
Interest tax shields reduce effective cost: after-tax = pre-tax × (1 − T) for deductible amounts.