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Can you help with this question, please. Thank You The weighted average cost of capital formula (WACC) shown below is the accepted method of computing
Can you help with this question, please. Thank You
The weighted average cost of capital formula (WACC) shown below is the accepted method of computing a firm's cost of capital. WACCadj = E x Re + PS x Rps + D x Rd X (1 - Tc) V V V Where: E = Equity dollars of financing PS = Preferred Stock dollars of financing D = Debt (bond) dollars of financing V = Total financing = E +PS +D Re = % Cost of Common Stock Rps = % Cost of Preferred Stock Rd = % Cost of Debt after tax Tc = Effective tax rate After reviewing this formula, In a one paragraph posting, answer the following questions and provide a short supporting rationale for each answer. The answer does not require a quantitative solution What impact will the following company actions have on the company's weighted average cost of capital (WACC): 1. An Increase in the company's corporate tax rate? 2. An Increase in the company's flotation cost? 3. An increase in the company's dividend? Can you demonstrate your answer mathematicallyStep by Step Solution
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