Question
Rogot Instruments makes fine violins and cellos. It has $ 1.4 million in debtoutstanding, equity valued at $ 2.9 million, and pays corporate income tax
Rogot Instruments makes fine violins and cellos. It has $ 1.4 million in debtoutstanding, equity valued at $ 2.9 million, and pays corporate income tax at rate 34 %. Its cost of equity is 12 % and its cost of debt is 5 %.
a. What isRogot's pre-taxWACC? (round to two decimal places)
b. What isRogot's (effectiveafter-tax) WACC? (round to two decimal places)
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Personal Financial Planning
Authors: Randy Billingsley, Lawrence J. Gitman, Michael D. Joehnk
14th edition
978-1305887725, 1305887727, 1305636619, 978-1305636613
