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You have estimated the weighted average cost of capital for a new airline business at 10%. The capital structure is 50% debt, 25% preference share
You have estimated the weighted average cost of capital for a new airline business at 10%. The capital structure is 50% debt, 25% preference share and 25% ordinary shares. The risk free rate is 4%, the market risk premium 4% and the corporate tax rate 30%. The cost of debt is 8% and the cost of preference share 10%. What is the beta of the new airline business?
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