II$.($Reference: Lecture Note $3,$ Slides $54-55)$

Consider the following airline industry data from mid$-2009$:

$\backslash$table$[[$Company Name,$\backslash$table$[[$Market$],[$Capitalization$],[($Smm$)]],\backslash$table$[[$Total$],[$Enterprise$],[$Value $($Smm$)]],$Equity Beta,Debt Ratings$],[$Delta Air Lines $($DAL$),4,938\mathrm{.}5,17,026\mathrm{.}5,2\mathrm{.}06,$B$],[$Southwest Airlines $($LUV$),4,896\mathrm{.}8,6,372\mathrm{.}8,0\mathrm{.}966,$BBB$],[$JetBlue Airways $($JBLU$),1,245\mathrm{.}5,3,833\mathrm{.}5,1\mathrm{.}91,$CCC$],[$Continental Airlines $($CAL$),1,124\mathrm{.}0,4,414\mathrm{.}0,1\mathrm{.}99,$BB$]]$

Suppose that you are considering expanding your business into airline industry and need to estimate cost of capital of your project. Risk$-$free rate and market risk premium are $2\%$ and $6\%$

a$)$ Estimate asset beta of the airline industry