Rockstar Corporation has 2.74 million ordinary shares that currently trade for $67.15, an equity book value of $2.7 million and retained earnings of $37.1 million. lt also has $64.0 million in debt currently trading for 100% of its fair value. A) What weights should it use in computing its WACC? (1 mark) The debt weight for the WACC calculation is???%. (Round to two decimal places.) The equity weight for the WACC calculation is ???%. (Round to two decimal places.) B) Rockstar Corporation has a cost of equity of 15.8% and has an effective cost of debt of 5.4 %. What is this firm's WACC? (Assuming no tax environment) (1.5 marks) Rockstar Corporation's WACC is ???%.(Round to two decimal places.) C) Assume Rockstar Corporation has a cost of equity of 15.8% and has an effective cost of debt of 5.4 %and an effective tax rate is 27.0%. What is this firm's after tax - WACC? (1.5 marks) Rockstar Corporation's after-tax WACC is ???%. (Round to two decimal places.)

A) To calculate the weights for the WACC, we first need to calculate the market value of equity and the market value of debt:

Market Value of Equity = Number of Shares * Price per Share = 2.74 million * $67.15 =$183.97 million

Market Value of Debt = $64 million (since it's trading at 100% of its fair value)

Total Value of the Firm = Market Value of Equity + Market Value of Debt = $183.97 million +$64 million = $247.97 million

Now, we can calculate the weights:

Debt Weight = Market Value of Debt / Total Value of the Firm = $64 million /$247.97 million = 0.2582 or 25.82%

Equity Weight = Market Value of Equity / Total Value of the Firm = $183.97 million /$247.97 million = 0.7418 or 74.18%

B) The WACC is calculated as the weighted average of the cost of equity and the cost of debt:

WACC = Equity Weight * Cost of Equity + Debt Weight * Cost of Debt = 0.7418 * 15.8% + 0.2582 * 5.4% = 13.02%

Therefore, Rockstar Corporation's WACC is 13.02%.

C) If there is a tax environment, the cost of debt is adjusted for the tax rate:

After-Tax Cost of Debt = Cost of Debt * (1 - Tax Rate) = 5.4% * (1 - 0.27) = 3.942%

Now, we can calculate the after-tax WACC:

After-Tax WACC = Equity Weight * Cost of Equity + Debt Weight * After-Tax Cost of Debt = 0.7418 * 15.8% + 0.2582 * 3.942% = 12.32%

Therefore, Rockstar Corporation's after-tax WACC is 12.32%.