Rumolt Motors has 51 million shares outstanding with a share price of $13 per share. In? addition, Rumolt has issued bonds with a total current market value of $518 million. Suppose? Rumolt's equity cost of capital is 11%?, and its debt cost of capital is 8%.
a. What is? Rumolt's pre-tax? WACC?
b. If? Rumolt's corporate tax rate is 35%?, what is its? after-tax WACC?