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Question 5: Craftmaker Tools Company sells a wide assortment of tools for plumbers and painters through 8 retail stores located in Illinois. Because of net
Question 5: Craftmaker Tools Company sells a wide assortment of tools for plumbers and painters through 8 retail stores located in Illinois. Because of net losses in the past few years, the company has not been an income tax payer. It currently has Tzs.20 million of Debt outstanding and Tzs. 15 million of Equity capital outstanding in its capital structure. It's Cost of Debt currently is 8.75% and it has a Cost of Equity of 30%. What would be the change in its weighted average cost of capital ("WACC") if it becomes an income tax payer and its marginal income tax rate increases to 39%? Calculate to 4 decimal places
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