Description of this paper

capital and tax rates




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 25% debt financed and you anticipate its debt cost of capital will be 6%. If its corporate tax rate is 40%, what is your estimate of it WACC?;Additional Requirements;Level of Detail: Show all work


Paper#17923 | Written in 18-Jul-2015

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