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Airlines has the following target and costs associated with its capital structure. Based on these parameters what is Blue Airlines' weighted average cost of capital?
Airlines has the following target and costs associated with its capital structure. Based on these parameters what is Blue Airlines' weighted average cost of capital? Please explain every step with formulas.
Target common equity weight: | 35 percent |
Target debt weight: | 65 percent |
Cost of equity: | 11 percent |
Cost of debt: | 7 percent |
Tax rate: | 26 percent |
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