Question
WACC = Weighted Cost of Equity + Weighted Cost of debt*(1-tax
rate)
(7.69%*37%)+(6.79%*63%)*(1-20%) = 6.27%
Recalculate the market value WACC, but now assume that Tesla is a profitable firm, with a tax rate of 22%:
Finance
WACC = Weighted Cost of Equity + Weighted Cost of debt*(1tax