What is a debt charge? Is it : cost of debt*(1-tax) * debt?
From CFAI book pg 494
"In this second approach, which takes the perspective of all providers of capital (both debt and equity), a [capital charge] (the company’s total cost of capital in money terms) is subtracted from the company’s after-tax operating profit. In the case of AXCI in [Example 1], the capital charge is €169,000:
|Equity charge|0.12 × €1,000,000 =|€120,000|
|Debt charge|0.07(1 − 0.30) × €1,000,000 =|49,000|
|Total capital charge||€169,000| "