One calculates the after-tax weighted average cost of capital (WACC) using which formula?

Weighted average cost of capital

= Ke (We) + Kp (Wp) + Kd (Wd) (1 - T)

Where

Ke = Cost of equity

We = Weight of equity in the capital structure

Kp = Cost of preferred stock

Wp = weight of preferred stock in the capital structure

Kd = Cost of debt

Wd = Weight of debt in the capital structure.

T = Tax rate

Explanation:

Weighted average cost of capital equals cost of equity multiplied by the weight of equity in the capital structure plus cost of preferred stock multiplied by weight of preferred stock in the capital structure plus after tax cost of debt multiplied by weight of debt in the capital structure.