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Just Part B. Please Omega Corporation has 10.1 million shares outstanding, now trading at $56 per share. The firm has estimated the expected rate of
Just Part B. Please
Omega Corporation has 10.1 million shares outstanding, now trading at $56 per share. The firm has estimated the expected rate of return to shareholders at about 13%. It has also issued long-term bonds at an interest rate of 8% and has a debt value of $205 million. It pays tax at a marginal rate of 21% a. What is Omega's after-tax WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) After-tax WACC 11.22 b. What would WACC be if Omega used no debt at all? (Hint: For this problem, you can assume that the firm's overall beta (BA) is not affected by its capital structure or by the taxes saved because debt interest is tax deductible.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) WACC 11.22 Step by Step Solution
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