One calculates the after-tax weighted average cost of capital (WACC) as
A) WACC = rD (D/V) + rE (E/V) ; (where V = D + E) .
B) WACC = rD (1 - TC) (D/V) + rE (E/V) ; (where V = D + E) .
C) WACC = rD (D/V) + rE (1 - TC) (E/V) ; (where V = D + E) .
D) WACC = (1 - TC) × ( rD (D/V) + rE (E/V) ) ; (where V = D + E) .
Correct Answer:
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