Rogot Instruments makes fine violins and cellos. It has $1 million in debt outstanding, equity valued at

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Rogot Instruments makes fine violins and cellos. It has $1 million in debt outstanding, equity valued at $2 million, and pays corporate income tax at rate of 21%. Its cost of equity is 12%

and its cost of debt is 7%.

a. What is Rogot’s pretax WACC?

b. What is Rogot’s (effective after-tax) WACC?

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Corporate Finance

ISBN: 9780137845071

6th Edition

Authors: Jonathan Berk, Peter DeMarzo

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Question Posted: Jun 12, 2024 01:13 AM

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Rogot Instruments makes fine violins and cellos. It has $1 million in debt outstanding, equity valued at

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Corporate Finance

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