Question: Consider the following airline industry data from mid-2009: a. Use the estimates in Table 12.3 to estimate the debt beta for each firm (use an

Consider the following airline industry data from mid-2009:

a. Use the estimates in Table 12.3 to estimate the debt beta for each firm (use an average if multiple ratings are listed).
b. Estimate the asset beta for each firm.
c. What is the average asset beta for the industry, based on thesefirms?

Market Total Capitalization Enterprise (Smm)Value (Smm) 4,938.5 4,896.8 1,245.5 1,124.0 Debt Ratings Company Name Delta Air Lines (DAL) Southwest Airlines (LUV) JetBlue Airways JBLU) Continental Airlines (CAL) 17,026.5 6,372.8 3,833.5 4,414.0 Equity Beta 2.04 0.966 1.91 1.99

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