Question: Rogot Instruments makes fine violins and cellos. It has $1.5 million in debt outstanding, equity valued at $2.7 million, and pays corporate income tax at
Rogot Instruments makes fine violins and cellos. It has $1.5 million in debt outstanding, equity valued at $2.7 million, and pays corporate income tax at rate 25%. Its cost of equity is 14% and its cost of debt is 8% a. What is Rogot's pretax WACC? b. What is Rogot's (effective after-tax) WACC? a. What is Rogot's pretax WACC? Rogot's pretax WACC is \%. (Round to two decimal places.) b. What is Rogot's (effective after-tax) WACC? Rogot's (effective after-tax) WACC is \%. (Round to two decimal places.)
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