The marginal tax rate of the ﬁrm is considered, directly or indirectly, in the weighted average cost of
capital.

Name: The marginal tax rate of the ﬁrm is considered, directly or indirectly, in the weighted average cost of capital.
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Question

Quizplus · Accepted Answer

The marginal tax rate is a factor in the calculation of the cost of debt, which is part of the weighted average cost of capital. Therefore, the marginal tax rate is indirectly included in the calculation of the WACC.

The Marginal Tax Rate of the ﬁRm Is Considered, Directly