Question
Rumolt Motors has 44 million shares outstanding with a share price of $25 per share. In addition, Rumolt has issued bonds with a total current
Rumolt Motors has 44 million shares outstanding with a share price of $25 per share. In addition, Rumolt has issued bonds with a total current market value of $345 million. Suppose Rumolt's equity cost of capital is 12%, and its debt cost of capital is 5%. a. What is Rumolt's pre-tax WACC? b. If Rumolt's corporate tax rate is 21%, what is its after-tax WACC?
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Finance Plain And Simple
Authors: Sebastian Nokes
1st Edition
0273731297, 978-0273731290
