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Rumolt Motors has 52 million shares outstanding with a share price of $11 per share. In addition, Rumolt has issued bonds with a total current

Rumolt Motors has 52 million shares outstanding with a share price of $11 per share. In addition, Rumolt has issued bonds with a total current market value of $808 million. Suppose Rumolt's equity cost of capital is 9%, and its debt cost of capital is 6%.

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

b. If Rumolt's corporate tax rate is 35%, what is its after-tax WACC?

ROUND TO TWO DECIMAL PLACES

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