Calculate weighted average cost of capital given tax rate

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Reference no: EM131552598

K. Bell Jewelers wishes to explore the effect on its cost of capital of the rate at which the company pays taxes. The firm wishes to maintain a capital structure of 40?%?debt, 10?% preferred? stock, and 50%common stock. The cost of financing with retained earnings is 15?%, the cost of preferred stock financing is 9?%, and the? before-tax cost of debt financing is 11?%.

Calculate the weighted average cost of capital (WACC?) given a tax rate of 40 %.

The firm's WACC is? (Round to two decimal places)

Reference no: EM131552598

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