[Verse 1]
When companies need capital to grow their dreams
They borrow money, nothing's quite what it seems
The interest rate they pay seems crystal clear
But there's a hidden discount waiting here
[Pre-Chorus]
Uncle Sam steps in with tax relief
Making debt much cheaper than belief
[Chorus]
Cost of debt, it's not what meets the eye
Take the rate and multiply
By one minus tax, that's your shield
After-tax cost gets revealed
Thirty percent saves you money
Makes borrowing taste like honey
Cost of debt fundamentals, now you see
The government's your financing key
[Verse 2]
If your rate is eight percent today
And taxes steal thirty percent away
Your true cost drops to five-point-six
That's the mathematical magic trick
[Pre-Chorus]
Interest payments shrink your taxable base
Puts more money back in corporate space
[Chorus]
Cost of debt, it's not what meets the eye
Take the rate and multiply
By one minus tax, that's your shield
After-tax cost gets revealed
Thirty percent saves you money
Makes borrowing taste like honey
Cost of debt fundamentals, now you see
The government's your financing key
[Bridge]
Formula dancing in my head
Rate times bracket equals what you shed
Zero-point-seven when the tax is thirty
Keep this math forever in your memory
[Verse 3]
Bondholders charge for risk they take
Credit spreads and curves they make
But companies smile behind the scenes
Tax deduction cuts their means
[Final Chorus]
Cost of debt, it's not what meets the eye
Take the rate and multiply
By one minus tax, that's your shield
After-tax cost gets revealed
Government subsidizing every loan
Making corporate debt less prone
To drain the treasure from your corporate throne
Tax shield magic, now it's known
[Outro]
After-tax, after-tax
That's the number, that's the facts