Consider the following airline industry data from mid-2009 a. Use the estimates in table to estimate the debt beta for each firm (use an average if multiple ratings are listed). b. Estimate the asset bota for each firm c. What is the average asset bota for the industry, based on these firms? a. Use the estimates in table to estimate the debt beta for each firm (uso an average if multiple ratings are listed) The bota of the debt for each company is: (Round to three decimal places.) Market Total Enterprise Capitalization Value Company Name (5 million) (5 million) Equity Beta Delta Air Lines (DAL) 4.949.7 16,909,3 2.036 Southwestes (LUV) 4,913,6 6,378 9 0.973 JetBlue Airw..y (JBLU) 1.221.4 3,831.2 1.902 Cortinental Airlines (CA) 1,0672 4,305,3 2006 b. Estimate the annet bets for each tim The bota of the amouchera (Round to three decimal place) Total Enterprise Market Company Name Capitalization (5 million) is million) Equity Beta Delta Air Lines (DAL) 4,949.7 16.999 3 2036 Southwest Airlines (LUV) 4,913.6 6,3789 0.973 JetBlue Airways (JBLU) 3,8312 Continental Airlines (CAL) 1,0672 2066 Debt Ratings 88 A/BBB B/CCC B Debt Beta 17 075 285 20 Value Asset Beta Debt Beta 0.170 0.075 0285 0 260 1.221.4 1.902 4,3653 That By rating Average beta Average Debt Betas by Rating and Maturity A and above BBB BB 15 Yr Average beta 0.01 0.06 0.07 0.14 Sour S. Schaefer and I. Strebulaev, "Risk in Capital Structure Arbitrage," Stanford GSB working nanai 2009