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What is Rumolt pretax WACC

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Question - 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 Rumolt's equity cost of capital is 10%, and its debt cost of capital is 5%.

a. What is Rumolt's pretax WACC?

b. If Rumolt's corporate tax rate is 21%, what is its after-tax WACC?

Reference no: EM132935965

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