Question: Rogot Instruments makes fine violins and cellos. It has $1.2 million in debt outstanding, has equity valued at $2.2 million, and pays corporate income tax

Rogot Instruments makes fine violins and cellos. It has $1.2 million in debt outstanding, has equity valued at $2.2 million, and pays corporate income tax at a rate of 21%. Its cost of equity is 13%, and its cost of debt is 5%.

a. What is Rogot's pre-tax WACC? Rogot's pre-tax WACC is 10.18%

b. What is Rogot's (effective after-tax) WACC? ???

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