Rumolt Motors has 46 million shares outstanding with a share price of $44 per share....
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Rumolt Motors has 46 million shares outstanding with a share price of $44 per share. In addition, Rumolt has issued bonds with a total current market value of $630 million. Suppose Rumolt's equity cost of capital is 15%, and its debt cost of capital is 6%. a. What is Rumolt's pre-tax WACC? b. If Rumolt's corporate tax rate is 25%, what is its after-tax WACC? Question content area bottom Part 1 a. What is Rumolt's pre-tax WACC? Rumolt's pre-tax WACC is enter your response here%. (Round to two decimal places.) Part 2 b. If Rumolt's corporate tax rate is 25%, what is its after-tax WACC? Rumolt's after-tax WACC is enter your response here%. (Round to two decimal places.)
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