Question: United Airlines is considering adding a new hub operation on Mars. The finance group at UAL has gathered the following data. They have hired you

United Airlines is considering adding a new hub operation on Mars. The finance group at UAL has gathered the following data. They have hired you as a Finance consultant to help them determine their cost of capital.
Total Enterprise Value is $24 billion
Current stock market capitalization in $8 billion, shares are trading at $25
Outstanding Debt has a 5.2% yield to maturity
UAL pays a quarterly dividend of $.58, up from $.50 four years ago
The current risk free rate is 3.5%, UAL's Beta is 1.3, the market premium is 5%
UAL pays a corporate tax rate of 25%
What debt and equity weights will United use to calculate WACC?
What is United's cost of debt?
What is United's cost of common equity?
What is United's WACC?

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