The effect of tax rate on wacc k bell jewelers wishes to, Ask an Expert

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The effect of tax rate on WACC K. Bell Jewelers wishes to explore the effect on its cost of capital of the rate at which the company pays taxes. The firm wishes to maintain a capital structure of 25% debt, 15% preferred stock, and 60% common stock. The cost of financing with retained earnings is 13%, the cost of preferred stock financing is 9%, and the before tax cost of debt financing IS 7%. Calculate the weighted average cost of capital (WACC given a tax rate of 30% The firm's WACC is | |96. (Round to two decimal places.)

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Financial Management, Finance

Category:- Financial Management
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