EVERYTHING IS ONE QUESTION

Consider the following airline industry data from mid-2009: a. Use the estimates in table 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 these firms? Debt a. Use the estimates in table to estimate the debt beta for each fimm (use an average of multiple ratings are listed). ). The beta of the debt for each company is: (Round to three decimal places.) ) Market Total Enterprise Capitalization Value Company Name (5 million) (5 million) Delta Air Lines (DAL) 4,959.9 16,970.9 Southwest Airlines (LUV) 4,933.9 6,380.6 JetBlue Airways (JBLU) 1,264.3 3,876.4 Continental Airlines (CAL) 1,056.9 4,363.4 Ratings Debt Beta Equity Beta 2.086 0.908 1.893 1.919 BB ABBB B/CCC B Data table (Click on the following icon in order to copy its contents into a spreadsheet.) By rating Average beta Average Debt Belas by Rating and Maturity A and above BBB BE 15 Y Average beta 0.01 0.06 0.07 0.14 Source: S. Schaefer and I. Strebulaev, "Risk in Capital Structure Arbitrage," Stanford GSB working paper, 2009 Help me solve this View an exam Clear all Final check Print Done