of the work you have done so far is correct, you may not have completed everythi

ID: 2822443 • Letter: O

Question

of the work you have done so far is correct, you may not have completed everything value 6.66 points Omega Corporation has 10.9 million shares outstanding, now trading at $64 per share. The firm has estimated the expected rate of return to shareholders at about 15%, it has also issued $245 million of long- term bonds at an interest rate of 6% it pays tax at a marginal rate of 34%. a. What is Omega's after-tax WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) After-tax WACC 1% 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 [BA] 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.) WACC

Explanation / Answer

WACC = 12.13%

b. If all is equity then WACC = cost of equity = 15%

Amount weight cost weight*cost equity 697.60 0.7401 15.0000% 0.1110 debt 245.00 0.2599 3.9600% 0.0103

Navigate

of the volium oreign 2 How does the relevant range apply How does the growth of

of the: 42, Fine control of body coordination and balanco is a a. Cerebellum b.

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.

of the work you have done so far is correct, you may not have completed everythi

Question

Explanation / Answer

Related Questions

Navigate