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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 10%. However, the new business will be 23% debt financed, and you anticipate its debt cost of capital will be 7%. If its corporate tax rate is 33%, what is your estimate of its WACC?

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