Rumolt Motors has 58 million shares outstanding with a share price of $26 per share. In addition, Rumolt has issued bonds with a total current market value of $991 million. Suppose Rumolt’s equity cost of capital is 14%, and its debt cost of capital is 7%.

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?