If a firm's tax rate increases,then its weighted average cost of capital increases also.

Name: If a firm's tax rate increases,then its weighted average cost of capital increases also.
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An increase in the tax rate actually decreases the cost of debt because interest payments are tax-deductible, which can lower the weighted average cost of capital if the firm uses a significant amount of debt financing.

If a Firm's Tax Rate Increases,then Its Weighted Average Cost