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12. Rumolt Motors has 41 million shares outstanding with a share price of $32 per share. In addition, Rumolt has issued bonds with a total
12. Rumolt Motors has 41 million shares outstanding with a share price of $32 per share. In addition, Rumolt has issued bonds with a total current market value of $1,484 million. Suppose Rumolt's equity cost of capital is 11%, and its debt cost of capital is 5%. a. What is Rumolt's pre-tax WACC? b. If Rumolt's corporate tax rate is 30%, what is its after-tax WACC? a. What is Rumolt's pre-tax WACC? Rumolt's pre-tax WACC is %. (Round to two decimal places.) b. If Rumolt's corporate tax rate is 30%, what is its after-tax WACC? Rumolt's after-tax WACC is %. (Round to two decimal places.)
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