Adjusted

WACC.

Lewis runs an outdoor adventure company and wants to know what effect a tax change will have on his company's WACC. Currently, Lewis has the following financing pattern: Equity:

38%

and cost of

14.63%

Preferred stock:

19%

and cost of

10.83%

Debt:

43%

and cost of

9.5%

before taxes

What is the adjusted WACC for Lewis if the tax rate is

a.

40%?

Question content area bottom

Part 1

What is the adjusted WACC for Lewis if the tax rate is

40%?

enter your response here%

(Round to two decimal places.)