What is after-tax weighted average cost of capital

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Reference no: EM132075817

Question: Rumolt Motors has 3939 million shares outstanding with a price of $ 50$50 per share. In? addition, Rumolt has issued bonds with a total current market value of $ 1 comma 801$1,801 million. Suppose? Rumolt's equity cost of capital is 15 %15%?, and its debt cost of capital is 11 %11%.

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

b. If Rumolt's corporate tax rate is 30%, what is its after-tax weighted average cost of capital?

Reference no: EM132075817

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