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Omega Corporation has 10.6 million shares outstanding, now trading at $61 per share. The firm has estimated the expected rate of return to shareholders at

Omega Corporation has 10.6 million shares outstanding, now trading at $61 per share. The firm has estimated the expected rate of return to shareholders at about 12%. It has also issued long-term bonds at an interest rate of 8%. It pays tax at a marginal rate of 40%. Assume a $230 million debt issuance.

a.

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