Question
Rogot Instruments makes fine violins and cellos. It has $1.9 million in debtoutstanding, equity valued at $2.3 million and pays corporate income tax at rate
Rogot Instruments makes fine violins and cellos. It has $1.9 million in debtoutstanding, equity valued at $2.3 million and pays corporate income tax at rate 21%. Its cost of equity is 11% and its cost of debt is 6%.
a. What isRogot's pretaxWACC?
Rogot's pretax WACC is ..............%. (Round to two decimalplaces.)
b. What isRogot's (effectiveafter-tax) WACC?
Rogot's (effectiveafter-tax) WACC is ...............%. (Round to two decimalplaces.)
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Fundamentals of Investments Valuation and Management
Authors: Bradford D. Jordan, Thomas W. Miller
5th edition
978-007728329, 9780073382357, 0077283295, 73382353, 978-0077283292
