The equity cost of capital

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Reference no: EM132008743

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 10 % However, the new business will be 21 % debt financed, and you anticipate its debt cost of capital will be 5 %. If its corporate tax rate is 34 % what is your estimate of its WACC?

The equity cost of capital is ___ (Round to one decimal place.)

Reference no: EM132008743

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