Rearden Metal currently has no debt and an equity cost of capital of 14%.Suppose that Rearden decides to increase its leverage and maintain a market debt-to-value ratio of 1/2.Suppose Rearden's debt cost of capital is 8% and its corporate tax rate is 21%.Assuming that Rearden's pre-tax WACC remains constant,then with the addition of leverage its effective after-tax WACC will be closest to:

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The Answer of Rearden Metal currently has no debt and an equity cost of capital of 14%.Suppose that Rearden decides to increase its leverage and maintain a market debt-to-value ratio of 1/2.Suppose Rearden's debt cost of capital is 8% and its corporate tax rate is 21%.Assuming that Rearden's pre-tax WACC remains constant,then with the addition of leverage its effective after-tax WACC will be closest to:

Rearden Metal Currently Has No Debt and an Equity Cost