[Cash Flow King]

Hmm, a cash flow question...
I suppose I should give it a shot since I am the "Cash Flow King."

The interest the company pays on its debt is deductable and Rd itself does not include the tax deduction benefits the company receives. Thus, you must subtract the amount in which the company saved (from the deduction) from the paid interest. The pre-tax cost of debt (Rd) does not include the deduction benefits, therefore, the post-tax cost of debt is a better figure to use.

Ex.
A company issues a bond and it pays 4% on it. The pre-tax cost of debt would just be 4%. But if the company's Rt were 25%, the post-tax cost of debt would be calculated as 0.04*(1-0.25)*100 = 3%. This is the general concept behind the pre- and post-tax cost of debt.