Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. rumolt motors has 24 million shares outstanding wi

Rumolt Motors has 24 million shares outstanding with a price of $56 per share. In...

70.2K

Verified Solution

Question

Accounting

image

Rumolt Motors has 24 million shares outstanding with a price of $56 per share. In addition, Rumolt has issued bonds with a total current market value of $1,485 million. Suppose Rumolt's equity cost of capital is 12%, and its debt cost of capital is 8%. a. What is Rumolt's pretax weighted average cost of capital? b. If Rumolt's corporate tax rate is 21%, what is its after-tax weighted average cost of capital? a. What is Rumolt's pretax weighted average cost of capital? Rumolt's pretax weighted average cost of capital is %. (Round to two decimal places.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students