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Omega Corporation has 11.4 million shares outstanding, now trading at $51 per share. The firm has estimated the expected rate of return to shareholders at

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Omega Corporation has 11.4 million shares outstanding, now trading at $51 per share. The firm has estimated the expected rate of return to shareholders at about 14%. It has also issued long-term bonds at an interest rate of 6% and has a debt value of $180 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 used no debt at all? (Hint: For this problem, you can assume that the firm's overall beta [8,4] is not affected by its capital structure or by the taxes saved because debt interest is tax-deductible.) Note: For all requirement, do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. After-tax WACC % b. WACC %

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