Why do we adjust for taxes in determining the cost of debt, Finance Basics

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Why do we adjust for taxes in determining the cost of debt

If there are costs associated with financial distress, how may this affect the capital structure decision of a company? Why do we adjust for taxes in determining the cost of debt, but not for the costs of preferred stock and common stock? What is traded off in the trade-off theory of capital structure?

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Finance Basics: Why do we adjust for taxes in determining the cost of debt

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