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Calculate the wacc change if the new tax

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Westbrook's Painting Co. plans to issue a $1,000 par value, 20-year non-callable bond with a 7.00% annual coupon, paid semiannually. The company's marginal tax rate is 40.00%, but Congress is considering a change in the corporate tax rate to 30.00%. By how much would the component cost of debt used to calculate the WACC change if the new tax rate was adopted?

Reference no: EM132497865

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