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...

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%. It pays tax at a marginal rate of 35%. Assume a $190 million debt issuance.

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

How much higher would WACC be if Omega used no debt at all? (Hint:
For this problem you can assume that the firm’s overall beta [ß
_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.)