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Rogot Instruments makes fine violins and cellos. It has ​$1.9 million in debt​ outstanding, equity valued...

Rogot Instruments makes fine violins and cellos. It has ​$1.9 million in debt​ outstanding, equity valued at ​$2.2 million and pays corporate income tax at rate 35 % . Its cost of equity is 10 % and its cost of debt is 6 % .

a. What is​ Rogot's pretax​ WACC? (Round by two decimals)

b. What is​ Rogot's (effective​ after-tax) WACC? (Round by two decimals)

Solutions

Expert Solution

I have calculated both the pre tax and after tax wacc for Rogot Instruments. I have done the detailed calculation along with formulas too in the below pictures. You may ask any doubts in the comment section.

I hope this helps :)

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jeff jeffy answered 7 months ago
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