Question
Currently, United Airlines has no debt and their equity beta is 1.1. You know that the risk free rate is 3% and the market risk
Currently, United Airlines has no debt and their equity beta is 1.1. You know that the risk free rate is 3% and the market risk premium is 6.9%. The company CEO wants to change its capital structure to a debt to equity ratio of 1:5. Under the new capital structure, United Airlines projected cost of debt is 4%. What will be their cost of equity under the new capital structure?
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Healthcare Financial Management Applied Concepts And Practical Analyses
Authors: Cassandra R. Henson
1st Edition
0826144748, 978-0826144744
