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You would like to estimate the weighted average cost of capital for a new airline business....

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 27 % debt​ financed, and you anticipate its debt cost of capital will be 5 % . If its corporate tax rate is 35 % ​, what is your estimate of its​ WACC?

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