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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 8 %. However, the new business will be 23 % debt financed, and you anticipate its debt cost of capital will be 6 % If its corporate tax rate is 35 %, what is your estimate of its WACC?

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Financial Management, Finance

Category:- Financial Management
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