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The effect of tax rate on WACC K. Bell Jewelers wishes to explore the effect...

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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 t' o company pays taxes. The firm wishes to maintain a capital structure of 20% debt, 10% preferred stock, and 70% common stock. The cost of financing with retained earnings ; 11%, the cost of preferred stock financing is 11%, and the before-tax cost of debt financing is 8%. Calculate the weighted average cost of capital (WACC) given a tax rate of 40%

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