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Calculate the wacc change if the new tax rate was adopted

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Problem 1: Keys Printing plans to issue a $1,000 par value, 19-year noncallable bond with a 7% annual coupon, paid semiannually. The company's marginal tax rate is 42%, but Congress is considering a change in the corporate tax rate to 13%. By how much (in percent) would the component cost of debt used to calculate the WACC change if the new tax rate was adopted?

Reference no: EM132796663

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