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, 20?% preferred? stock, and 55% common stock. The cost of financing with retained earnings is 16?%, the cost of preferred stock financing is 9?%, and the? before-tax cost of debt financing is 8%. Calculate the weighted average cost of capital ?(WACC?) given a tax rate of 30 %.

The? firm's WACC is ?%. ?(Round to two decimal? places)

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Financial Management, Finance

Category:- Financial Management
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