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 26% debt financed, and you anticipate its debt cost of capital will be 6%. If its corporate tax rate is 35%, what is your estimate of its WACC?

1.The equity cost of capital is ?____ (Round to one decimal place.)

2.The weighted average cost of capital is?______(Round to one decimal place.)