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You would like to estimate the weighted average cost of capital for a new airline business. Based on its industry assetbeta, you have already estimated

You would like to estimate the weighted average cost of capital for a new airline business. Based on its industry assetbeta, you have already estimated an unlevered cost of capital for the firm of 9%.

However, the new business will be 29%

debtfinanced, and you anticipate its debt cost of capital will be 6%.

If its corporate tax rate is 35%,

what is your estimate of itsWACC?

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