Question
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 21% debt financed, and you anticipate its debt cost of capital will be 5%. If its corporate tax rate is 34%, what is your estimate of its WACC?
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Finance Budget And Management For Reference Services Routledge Library Editions Library And Information Science
Authors: Ruth A. Fraley, Bill Katz
1st Edition
0367374293, 978-0367374297
