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Effective after-tax wacc with the increase in leverage

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COWCOW, a builder of phone accessories has no debt and an equity cost of capital of 13%. Suppose that COWCOW decides to increase its leverage to maintain a market debt-to-value ratio of 0.4. Suppose its debt cost of capital is 9% and its coporate tax rate is 36%. If COWCOWs pre-tax WACC remains constant, what will be it's effective after-tax WACC with the increase in leverage?

The effective? after-tax WACC will be ___%. - round to two decimal places

Reference no: EM132141183

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