What is the formula to calculate cost of debt

It can be measured in before or after tax.

Before tax:

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Cost of Debt = (I + (M-NP)/n) / (M + NP) / 2

I = Dollar Return
M = Maturity Value
NP = Net Proceeds of issue
N = years

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After Tax:

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Cost of Debt = ( I (1-t) +(RV-SV) /n) / (RV+SV) /2

RV = Realisable value (ie they used $104 as this is the current price, not the maturity value)
SV = same as NP above

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Source: AskMeHelpDesk