Assume that investors hold Alphabet Inc (GOOGL) stock in retirement accounts that are free from personal taxes.

Published by admin at August 5, 2023

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Assume that investors hold Alphabet Inc (GOOGL) stock in retirement accounts that are free from personal taxes. Also assume that GOOGL’s current pre-tax WACC is 14% and its corporate tax rate is 35%. If GOOGL were to issue sufficient debt at a pre-tax cost of 7% to give them a debt to value ratio of 0.5, then the Google’s after-tax WACC would be closest to:

10.4%

12.8%

15.0%

16.0%

Assume that investors hold Alphabet Inc (GOOGL) stock in retirement accounts that are free from personal taxes.

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