Rogot Instruments makes fine violins and cellos. It has ($1.1) million in debt outstanding, equity valued at
Question:
Rogot Instruments makes fine violins and cellos. It has \($1.1\) million in debt outstanding, equity valued at \($2.2\) million, and pays corporate income tax at a rate of 40%. Its cost of equity is 12% and its cost of debt is 6%.
a. What is Rogot’s pretax WACC?
b. What is Rogot’s (effective after-tax) WACC?
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To find Rogot Instruments weighted average cost of capital WACC we need to calculate the weighted av...View the full answer
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