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 26% debt financed, and you anticipate its debt cost of capital will be 5%. If its corporate tax rate is 31%, what is your estimate of its WACC? The equity cost of capital is?
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Authors: Michael Fardon
1st Edition
1872962319, 1872962173, 978-1872962313, 978-1872962177
