Rumolt Motors has 21 million shares outstanding with a share price of $42 per share. In addition, Rumolt has issued bonds with a total current market value of

$991 million. Suppose Rumolt's equity cost of capital is 10%, and its debt cost of capital is 5%.

A a. What is Rumolt's pre-tax WACC?

b. If Rumolt's corporate tax rate is

40%,

what is its after-tax WACC?

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Part 1

a. What is Rumolt's pre-tax WACC?

Rumolt's pre-tax WACC is

enter your response here%.

(Round to two decimal places.)