cost of debt in WACC... spoiler alert if you use Schweser

CFA Level II
#1

In Schweser practice test 1, question 20, why did they not include the tax effect of debt in calculating WACC? I thought the formula for WACC is %debt*cost of debt(1-tax rate) +%equity*cost of equity.

but in the answer they did just %debt*cost of debt +%equity*cost of equity. and they didn’t specify that the cost of debt in after tax in the body of the questions…

#2

Maybe the cost of debt was already given on an after-tax basis?

#3

I noticed the same and it was not clear at all that it was after-tax. This has to be a mistake.

#4

It is a mistake look at the errrata page for schweser.