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Rumolt motors has 35 million shares outstanding with a

Question - Rumolt Motors has 35 million shares outstanding with a price of $52 per share. In addition, Rumolt has issued bonds with a total current market value of $804 million. Suppose Rumolt's equity cost of capital is 11%, and its debt cost of capital is 6%.

a. What is Rumolt's pretax weighted average cost of capital?

b. If Rumolt's corporate tax rate is 38%, what is its? after-tax weighted average cost of? capital?

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Accounting Basics: Rumolt motors has 35 million shares outstanding with a

Reference No:- TGS02434630

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Accounting Basics: Rumolt motors has 35 million shares outstanding with a

Reference No:- TGS02434630

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