3. Tesla Motors is looking to expand into the airline industry. The CFO find the following public firms in the airline industry: Company Market Cap Debt Equity Beta Debt Beta ($ mil) ($ mil) Delta 35,000 8,000 0.89 Southwest 28,000 3,000 0.86 0.1 American Airline 22,000 20,000 1.16 0.2 0.1 a) Calculate the average asset beta from the above three companies to measure the systematic risk of the running an airline business. (3 points) b) 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) c) The risk-free rate is 3% and the expected market return is 11%. Based on the debt and equity beta from (b), what is the cost of equity and cost of debt? (3 points) d) With a 40% tax rate, what is the WACC for the project? (3 points)