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What is your estimate of its wacc

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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 estimated an unlevered cost of capital for the firm of 10%. However, the new business will be 29% debt financed, and you anticipate its debt cost of capital will be 5%. If its corporate tax rate is 39%, what is your estimate of its WACC?

Reference no: EM133152595

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