Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134083278
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
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Chapter 15, Problem 10P
Rogot Instruments makes fine violins and cellos. It has $1 million in debt outstanding, equity valued at $2 million, and pays corporate income tax at rate of 35%. Its
- a. What is Rogot’s pretax WACC?
- b. What is Rogot’s (effective after-tax) WACC?
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Rogot Instruments makes fine violins and cellos. It has $1.7 million in debt outstanding, equity valued at $2.9 million
and pays corporate income tax at rate 21%. Its cost of equity is 11% and its cost of debt is 8%.
a. What is Rogot's pretax WACC?
b. What is Rogot's (effective after-tax) WACC?
Rogot Instruments makes fine violins and cellos. It has $1.9 million in debt outstanding, equity valued at $2.5 million, and pays corporate income tax at rate 33%. Its cost of equity is 13% and its cost of debt is 6%.
a. What is Rogot's pre-tax WACC?
b. What is Rogot's (effective after-tax) WACC?
a. What is Rogot's pre-tax WACC?
Rogot's pre-tax 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.)
K
Rogot Instruments makes fine violins and cellos. It has $1.8 million in debt outstanding, equity
valued at $2.9 million, and pays corporate income tax at rate 25%. Its cost of equity is 11% and
its cost of debt is 5%.
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.)
Chapter 15 Solutions
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Ch. 15.1 - With corporate income taxes, explain why a firms...Ch. 15.1 - Prob. 2CCCh. 15.2 - With corporate taxes as the only market...Ch. 15.2 - How does leverage affect a firms weighted average...Ch. 15.3 - How can shareholders benefit from a leveraged...Ch. 15.3 - How does the interest tax shield enter into the...Ch. 15.4 - Prob. 1CCCh. 15.4 - How does this personal tax disadvantage of debt...Ch. 15.5 - How does the growth rate of a firm affect the...Ch. 15.5 - Do firms choose capital structures that fully...
Ch. 15 - Prob. 1PCh. 15 - Grommit Engineering expects to have net income...Ch. 15 - Suppose the corporate tax rate is 40%. Consider a...Ch. 15 - Braxton Enterprises currently has debt outstanding...Ch. 15 - Your firm currently has 100 million in debt...Ch. 15 - Arnell Industries has just issued 10 million in...Ch. 15 - Prob. 7PCh. 15 - Prob. 8PCh. 15 - Safeco Inc. has no debt, and maintains a policy of...Ch. 15 - Rogot Instruments makes fine violins and cellos....Ch. 15 - Rumolt Motors has 30 million shares outstanding...Ch. 15 - Summit Builders has a market debt-equity ratio of...Ch. 15 - NatNah, a builder of acoustic accessories, has no...Ch. 15 - Restex maintains a debt-equity ratio of 0.85, and...Ch. 15 - Acme Storage has a market capitalization of 100...Ch. 15 - Milton Industries expects free cash flow of 5...Ch. 15 - Prob. 17PCh. 15 - Kurz Manufacturing is currently an all-equity firm...Ch. 15 - Rally, Inc., is an all-equity firm with assets...Ch. 15 - Prob. 20PCh. 15 - Facebook, Inc. had no debt on its balance sheet in...Ch. 15 - Markum Enterprises is considering permanently...Ch. 15 - Garnet Corporation is considering issuing...Ch. 15 - Suppose the tax rate on interest income is 35%,...Ch. 15 - With its current leverage, Impi Corporation will...Ch. 15 - Colt Systems will have EBIT this coming year of 15...Ch. 15 - PMF, Inc., is equally likely to have EBIT this...
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