Taxes only apply to the debt portion of your Weighted Average Cost of Capital equation. Businesses are allowed to deduct interest paid on debts on their federal taxes, so this must be accounted for in your WACC equation.

Now, how much you get to deduct will depend on your business's tax rate and your specific calculations.

There are online resources that might be informative, but I would seriously recommend working with a financial advisor or qualified accounting professional.

Please remember that it is impossible to give comprehensive tax advice over the internet, no matter how well researched or thoughtfully written. Before relying on any information given, you should always consult a qualified tax professional to discuss your specific situation.