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3. Rumolt Motors has 49 million shares outstanding with a share price of $37 per share. In addition, Rumolt has issued bonds with a total

3. Rumolt Motors has 49 million shares outstanding with a share price of $37 per share. In addition, Rumolt has issued bonds with a total current market value of $2,506 million. Suppose Rumolt's equity cost of capital is 10%, and its debt cost of capital is 6%. a. What is Rumolt's pre-tax WACC? b. If Rumolt's corporate tax rate is 35%, what is its after-tax WACC?

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