Question: consider the WACC, why in the formula do we include the term (1-Tax Rate) in the equation? The interest generated by the debt issuance is

consider the WACC, why in the formula do we include the term (1-Tax Rate) in the equation?
The interest generated by the debt issuance is depreciable
The interest on corporate bonds is deducted prior to taxes according to accounting rules
interest has more risk so we adjust for this with the deduction for taxes
that is "typically" less risky than equity, so this adjustment helps to compensate for this fact

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