Question: Q8. Ch18-26. WACC, Changing Debt Ratio Revtek, Inc., has an equity cost of capital of 12% and a debt cost of capital of 6%.

Q8. Ch18-26. WACC, Changing Debt Ratio Revtek, Inc., has an equity cost of capital of 12% and a debt cost of capital of 6%. Revtek maintains a constant debt-equity ratio of 0.5, and its tax rate is 35%. What is Revtek's WACC (After Tax) given its current debt-equity ratio? b. Assuming no personal taxes, how will Revtek's WACC change if it increases its debt-equity ratio to 2 and its debt cost of capital remains at 6%?

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