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 35% debt, 20% preferred stock, and 45 % common stock. The cost of financing with retained earnings is 15%, the cost of preferred stock financing is 11%, and the before-tax cost of debt financing is 11%. Calculate the weighted average cost of capital (WACC) given a tax rate of 35 %. You must MUST use at least one of the following Excel functions to answer at least one part of the question: FV, PV, PMT, RATE, NPER, NPV, AVERAGE, STDEV, and IRR.