Corporate finance please help
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points) You are an investment banker hired by Alaska Air Group (Ticker their capital structure 1) (WACC+ ALK), a regional airline based in Seattle, to help them with Al (5 points) ALK has 2,000 bonds outstanding. E Each bond has a face value of $1,000, a matur yield-to-maturity of 5%, what is years, and pays an annual coupon at a rate of 7%, if the bonds have a total valee of ALK's debe? What is its cost of debt (assuming the probability of default is low)? : 03 Cost of dst 's 59 equity trades cr theNew York Stock Exchange. You see that there are shares outstanding. Each share is expected to pay a dividend of $10 in one year from today, and annual dividends ate premium is 6%, are expected to grow at a constant rate of 3% in perpetuity. Finally, you t is the discount rate for its equity (assuming CAPM is true)? What is the total that ALK' s common equity has a beta of 1.5, the risk-free rate is 4%, and the market risk alue of what t ALK's common equity? 760 105 303 C) (5 points) ALK has a tax rate of 30% and excess cash of $203,027.68. Find ALK's wACC. and exces + D oj (s points) ALK maintains a constant D/E ratio. Using your above answers, what is the required return on the operations of the airline industry? In other words, what is the cost of assets for ALK? E) (5 points) The CEO of ALK is thinking about making a one-time change to ALK's capital structure. In particular, the CEO wants to issue equity to pay off some debt so that the firm's new D/E ratio equals 0.25. The new ratio is expected to remain constant after this one-time change. Assuming that the YTM on the debt stays the same, what would be the new required return for equity holders? The CEO of ALK is thinking about creating a new hub at the Denver airport. This would tal expenditure today of $500,000. The hub would generate a free cash flow of $33,000 F) (s points) require ac api annually rpetuity, starting in one year from today. The hub is a "carbon copy' of the firm. What is reakeven WACC that makes this a good investment