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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

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 9 % . However, the new business will be 26 % debt financed, and you anticipate its debt cost of capital will be 7 % . If its corporate tax rate is 38 % , what is your estimate of itsWACC?

The equity cost of capital is %. (Round to one decimalplace.)

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