The effect of tax rate on WACC K Bell Jewelers wishes to explore the effect on its cost of capital of the rate at which the company pays taxes. The firm wishes to maintain a capital structure of 40% debt, 20% preferred stock, and 40% common stock. The cost of financing with retained earnings is 12%, the cost of preferred stock financing is 9%, and the before-tax cost of debt financing is 8% Calculate the weighted average cost of capital (WACC) given a tax rate of 40% 4 The firm's WACC is% (Round to two decimal places.)