Question
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
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:34% and cost of 14.74%
Preferred stock:17% and cost of 12.22%
Debt:49% and cost of 10.9% before taxes
What is the adjusted WACC for Lewis if the tax rate is
a.35%?
b.25%?
c.15%?
d.5%?
e.0%?
a.What is the adjusted WACC for Lewis if the tax rate is 35%?
b. What is the adjusted WACC for Lewis if the tax rate is 25%
c What is the adjusted WACC for Lewis if the tax rate is 15%
d What is the adjusted WACC for Lewis if the tax rate is 5%
e What is the adjusted WACC for Lewis if the tax rate is 0%
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