What is the after-tax cost of capital formula and how can it be calculated effectively?

The after-tax cost of capital formula is: After-tax Cost of Capital (Cost of Debt x (1 - Tax Rate) x (Debt / Total Capital)) (Cost of Equity x (Equity / Total Capital))

To calculate it effectively, you need to determine the cost of debt and cost of equity, as well as the proportion of debt and equity in the company's capital structure. Multiply the cost of debt by (1 - Tax Rate) to account for the tax shield on interest payments. Then, multiply each component by its respective proportion in the capital structure and sum them up to get the after-tax cost of capital.