Question: You would like to estimate the weighted average cost of capital for a new airline business. Based on its industry asset beta, you have already

You would like to estimate the weighted average cost of capital

You would like to estimate the weighted average cost of capital for a new airline business. Based on its industry asset beta, you have already estimated an unlevered cost of capital for the firm of 9%. However, the new business will be 25% debt financed, and you anticipate its debt cost of capital will be 6%. If its corporate tax rate is 40%, what is your estimate of its WACC? The equity cost of capital is %. (Round to one decimal place.)

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