Calculate the after-tax WACC based on the following information: nominal interest rate on debt = 16%; cost of common equity = 30%; equity to value = 60%; debt to value = 40%; and a tax rate = 25%

a. 10%
b. 16%
c. 19.8%
d. 22.8%
e. 30%

ANSWER:

d. 22.8%