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QUESTION
Calculate the after-tax WACC based on the following information:
1. Calculate the after-tax WACC based on the following information: nominal interest rate on debt = 10%; cost of common equity = 20%; common equity = $600,000; interest-bearing debt = $400,000; and a tax rate = 30%.
a. 18.0%
b. 12.2%
c. 14.8%
d. 23.8%
