The common stock and debt of Northern Sludge are valued at $48 million and $19 million, respectively. Investors currently require a 17% return on the common stock and an 9% return on the debt. If Northern Sludge issues an additional $5 million of common stock and uses this money to retire debt, what is the new expected return on the stock? Assume that the change in capital structure does not affect the risk of the debt and that there are no taxes. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

2.- The common stock and debt of Northern Sludge are valued at $48 million and $19 million, respectively. Investors currently require a 17% return on the common stock and an 9% return on the debt. If Northern Sludge issues an additional $5 million of common stock and uses this money to retire debt, what is the new expected return on the stock? Assume that the change in capital structure does not affect the risk of the debt and that there are no taxes. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

^3.- Omega Corporation has 11.5 million shares outstanding, now trading at $50 per share. The firm has estimated the expected rate of return to shareholders at about 15%. It has also issued long-term bonds at an interest rate of 7% and has a debt value of $175 million. It pays tax at a marginal rate of 21%. a. What is Omegas after-tax WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

b. What 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. Enter your answer as a percent rounded to 2 decimal places.)