Question $11$

$4$ pts

$($G$3$N$12)$ You were hired as a consultant for a firm whose target capital structure is $40\%$ debt and $60\%$ common equity. The interest rate on debt is $8\%,$ and the common stockholders require a $15\%$ return. If Congress passes a law that lowers the company's tax rate, the weighted average cost of capital $($WACC$)$ will now be:

higher

unaffected

impossible to calculate

lower