Consider the following airline industry data from mid-2009; a. Use the estimates in table EE 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? a. Use the estimates in table EE to estimate the debt beta for each firm (use an average if multiple ratings are listed). The beta of the debt for each company is: Round to three decimal places.) Market Capitalization $ million 4,929.8 4,857.4 1,258.6 1,143.4 Total Enterprise Value $ million 16,972.9 Debt Ratings Debt Beta Company Name Delta Air Lines (DAL) Southwest Airlines (LUV) JetBlue Airways (JBLU) Continental Airlines (CAL) 6,362.2 3,811.7 4,361.2 Equity Beta 1.951 0.999 1.939 1.922 (Click on the icon located on the top-right comer of the data table below in order to copy its contents into a spreadsheet) Average Debt Betas by Rating and Maturit By rating Average beta A and above 0.05 0.10 0.17 0.26 0.31 15 Yr 0.01 15 Yr By ma Average beta BBB and above 5-10 Yr 0.06 10-15 Yr 0.07 0.14 Source: S. Schaefer and I. Strebulaev, "Risk in Capital Structure Arbitrage," Stanford GSB working paper, 2009