Omega Corporation has 11.6 million shares outstanding, now trading at $49 per share. The firm has estimated the expected rate of return to shareholders at about 11%. It has also issued long-term bonds at an interest rate of 8%. It pays tax at a marginal rate of 35%. Assume a $170 million debt issuance.

a.	What is Omegas after-tax WACC? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Omegas after-tax WACC

%

b.

How much higher would WACC be if Omega used no debt at all? (Hint: For this problem you can assume that the firms overall beta [?A] is not affected by its capital structure or by the taxes saved because debt interest is tax-deductible.) (Do not round intermediate calculations. Round your answer to 2 decimal places.)

WACC

%