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Rumolt Motors has 30 million shares outstanding with a price of $15 per share. In addition, Rumolt has issued bonds with a total current market
Rumolt Motors has 30 million shares outstanding with a price of $15 per share. In addition, Rumolt has issued bonds with a total current market value of $150 million. Suppose Rumolts equity cost of capital is 10%, and its debt cost of capital is 5%. (Please show steps and formulas)
What is Rumolts pretax WACC?
If the corporate tax rate is 35%, what is its after-tax WACC?
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