You work for a constant-growth firm that is valued at $500 million. It has a capital structure of 25% debt and 75% equity, and there are no short-term investments. Your firm's current tax rate is 25%, but Congress is expected to pass legislation that will increase it to 35%. If the firm's capital structure and costs of capital remain constant, what will happen to the firm's WACC? The WACC will remain constant. The WACC will increase. The WACC could increase, decrease, or remain constant. I am still waiting to start bowling, The WACC will decrease