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13. Adjusted WACC. Lewis runs an outdoor adventure company and wants to know what impact a tax change will have on his WACC. Currently Lewis
13. Adjusted WACC. Lewis runs an outdoor adventure company and wants to know what impact a tax change will have on his WACC. Currently Lewis has the following borrowing pattern: Equity: 35% and cost of 14%; Preferred Stock: 15% and cost of 1 1%; Debt: 50% and cost of 10% before taxes. What is the adjusted WACC for Lewis if the tax rate is a. 40%? b. 30%? c. 20%? d. 10%? e. 0%
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