Given are the following data: Cost of debt = rD = 6.0%; Cost of equity = rE = 12.1%; Marginal tax rate = 35%; and the firm has 50% debt and 50% equity. Calculate the after-tax weighted average cost of capital (WACC):
Added by Clara M.
Step 1
The formula for this is rD * (1 - Tax Rate). Substituting the given values, we get 6.0% * (1 - 0.35) = 3.9%. Show more…
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