Kindly solve questions 3 & 4 below. Round to 2 decimal places

3. a) b) c) d) 4. Tesla Motors is looking to expand into the airline industry. The CFO find the following public firms in the airline industry: Company Delta Southwest Market Cap Debt S mil 35,000 28,000 American Airline 22,000 S mil 8,000 3,000 20,000 Equity Beta 0.89 0.86 1.16 Debt Beta 0.1 0.1 0.2 Calculate the average asset beta from the above three companies to measure the systematic risk of the running an airline business. (3 points) Tesla's debt beta is 0.3. If Tesla plans to fund the airline business with half equity and half debt. What is the equity beta for the project? (3 points) The risk-free rate is 3% and the expected market return is I I Based on the debt and equity beta from (b), what is the cost of equity and cost of debt? (3 points) With a 40% tax rate, what is the WACC for the project? (3 points) Flagstaff Enterprises expected to have free cash flow in the coming year of $8 million, and this free cash flow is expected to grow at a rate of 3% per year thereafter. Flagstaff has an equity cost of capital of 13%, a debt cost of capital of 7%, and it is in the 35% corporate tax bracket. Flagstaff maintains a 0.5 debt to equity ratio A) What is the enterprise value of Flagstaff if it was an all equity firm? (3 points) B) What is the enterprise value ofFlagstaffas a levered firm? (3 points) C) What is the present value of the interest tax shield if the firm maintain the same debt- to-equity ratio? (3 points)