. Consider the follow ing airline industry data from mid-2009: Market Company Name Capitalization Total Enterprise ($mm)

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Consider The Follow Ing Airline Industry Data From Mid 2009 Market Company Name Capitalization Total Enterprise Mm 1 (74.08 KiB) Viewed 51 times

. Consider the follow ing airline industry data from mid-2009: Market Company Name Capitalization Total Enterprise ($mm) Value ($mm) Delta Air Lines (DAL) 4,938.5 17,026.5 Equity Beta Debt Ratings 2.04 BB Southwest Airlines (LUV) 4,896.8 6,372.8 0.966 A/BBB JetBlue Airways (JBLU) 1,245.5 3.833.5 1.91 B/CCC Continental Airlines (CAL) 1,124.0 4,414.0 1.99 B а. Use the estimates in Table 12.3 to estimate the debt beta for each firm (use an average if multiple ratings are listed). Estimate the asset beta for each firm. b. C. What is the average asset beta for the industry, based on these firms? Debt %Equity %Debt Market Cap EV DAL 4,938.50 17,026.50 LUV 4,896.80 6,372.80 JBLU 1,245.50 3,833.50 CAL 1,124.00 4,414.00 Equity Beta 2.04 0.966 Debt Ratings BB A/BBB B/CCC B Debt Beta (Table 12.3) Asset Beta 0.17 0.075 0.285 0.26 1.91 1.99