Question
Rogot Instruments makes fine violins and cellos. It has $1.2 million in debt outstanding, has equity valued at $2.2 million, and pays corporate income tax
Rogot Instruments makes fine violins and cellos. It has $1.2 million in debt outstanding, has equity valued at $2.2 million, and pays corporate income tax at a rate of 21%. Its cost of equity is 13%, and its cost of debt is 5%.
a. What is Rogot's pre-tax WACC? Rogot's pre-tax WACC is 10.18%
b. What is Rogot's (effective after-tax) WACC? ???
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Financial Markets Instruments And Institutions
Authors: Anthony M. Santomero, David Babbel
2nd Edition
0072358688, 9780072358681
