You would like to estimate the weighted average cost of capital for a new airline business. Based

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You would like to estimate the weighted average cost of capital for a new airline business. Based on its industry assetbeta, you have already estimated an unlevered cost of capital for the firm of 9%. However, the new business will be 24% debtfinanced, and you anticipate its debt cost of capital will be 5%. If its corporate tax rate is 32%, what is your estimate of itsWACC?

The equity cost of capital is

nothing

%. (Round to one decimalplace.)

Posted Date: May 19, 2024 04:07 PM

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