Consider the following airline industry data from mid-2009: Company Name Market Capitalization ($mm) Total Enterprise Value ($mm)

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Consider the following airline industry data from mid-2009:

Company Name Market Capitalization

($mm)

Total Enterprise Value ($mm) Equity Beta Debt Ratings Delta Air Lines (DAL) 4,938.5 17,026.5 2.04 BB Southwest Airlines (LUV) 4,896.8 6,372.8 0.966 A/BBB JetBlue Airways ( JBLU) 1,245.5 3,833.5 1.91 B/CCC

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 these firms?

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Corporate Finance

ISBN: 9781292304151

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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Question Posted: Jun 16, 2024 04:28 AM

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Consider the following airline industry data from mid-2009: Company Name Market Capitalization ($mm) Total Enterprise Value ($mm)

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Corporate Finance

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