You work for a zero-growth firm that is valued at $500 million. It has a...
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You work for a zero-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 35%, but Congress is expected to pass legislation that will decrease it to 25%. If the firm's capital structure, costs of capital, and all else remain constant, what will happen to the firm's WACC? The WACC will decrease. The WACC will increase. The WACC will remain constant. The WACC could increase, decrease, or remain constant
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