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 26%

debtfinanced, and you anticipate its debt cost of capital will be 5%.

If its corporate tax rate is 32%,

what is your estimate of itsWACC?

The equity cost of capital is ???