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Rumolt Motors has 23 million shares outstanding with a share price of $34 per share. In addition, Rumolt has issued bonds with a total
Rumolt Motors has 23 million shares outstanding with a share price of $34 per share. In addition, Rumolt has issued bonds with a total current market value of $204 million. Suppose Rumolt's equity cost of capital is 15%, and its debt cost of capital is 6%. a. What is Rumolt's pretax WACC? b. If Rumolt's corporate tax rate is 21%, what is its after-tax WACC?
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Practical financial management
Authors: William r. Lasher
5th Edition
0324422636, 978-0324422634
