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(20 points total) Long Q2: Delta airlines is re-evaluating their capital structure. Currently, the company has kept their debt to equity ratio fixed at 1/5.

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(20 points total) Long Q2: Delta airlines is re-evaluating their capital structure. Currently, the company has kept their debt to equity ratio fixed at 1/5. Their current equity beta is 1.2, the market risk premium is 5%, and the risk free rate is 3%. Their debt currently has a yield to maturity of 5.5%. Their tax rate is 254. What is their current cost of equity? What is their unlevered cost of capital (or cost of assets)? (Answer in percent. Ex for 1123. put 11.23)

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