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Omega Corporation has 11.2 million shares outstanding, now trading at $53 per share. The firm has estimated the expected rate of return to shareholders at
Omega Corporation has 11.2 million shares outstanding, now trading at $53 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 9% and has a debt value of $190 million. It pays tax at a marginal rate of 21%. a. What is Omega's after-tax WACC? b. What would WACC be if Omega had not to pay taxes and the expected rate of return to shareholders were unchanged? Note: For all requirements, do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. After-tax WACC b. WACC Check my work + % 11.27 %
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