Lewis runs an outdoor adventure company and wants to know what impact a tax change will have
Question:
Equity: 35% and cost of 14%
Preferred Stock: 15% and cost of 11%
Debt: 50% and cost of 10% before taxes.
What is the adjusted WACC for Lewis if the tax rate is
a. 40%?
b. 30%?
c. 20%?
d. 10%?
e. 0%?
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a Adjusted WACC 035 14 015 11 050 10 1 040 Adjusted WACC 49 165 30 955 b Adjusted WAC...View the full answer
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