{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-11T05:26:21-04:00", "answer_date": "2024-06-11 05:26:21", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "2621398", "url": "\/study-help\/questions\/f-2621398", "question_creation_date_js": "2024-06-11T05:26:21-04:00", "question_creation_date": "Jun 11, 2024 05:26 AM", "meta_title": "[Solved] Question 10 (15 points) NorthSouth Airlin | SolutionInn", "meta_description": "Answer of - Question 10 (15 points) NorthSouth Airlines has been granted permission to fly passengers between major IJS cities. Th | SolutionInn", "meta_keywords": "question,10,15,points,northsouth,airlines,granted,permission,fly,passengers,major,ijs", "question_title_h1": " Question 10 (15 points) NorthSouth Airlines has been granted permission to fly passengers between major IJS cities. The new company faces competition from four", "question_title": " Question 10 (15 points) NorthSouth Airlines has been granted permission to", "question_title_for_js_snippet": "Question 10 (15 points) NorthSouth Airlines has been granted permission to fly passengers between major IJS cities The new company faces competition from four airlines that operate between the major cities The betas of the equity of the four major competitors (A, B, C, D) are 1 63, 1 79, 1 97, and 213 and the debt to equity ratios of these four companies (in the same order A 8, C, D) are 0 14, 0 30, 0 49, and Although these DIE ratios vary, all airline debt is rated the same Suppose the yield on airline debt is 85 , the risk free rate is 4 5 and the expected market risk premium (the average difference between the market return and the risk free rate) is 7 5 What is the cost of capital (or discount rate) in percentage that pu should use in valuing NorthSouth Airlines (Allow two decimals in the percentage but do not enter the sigm) You entered ", "question_description": "\"image
\"image<\/div><\/div><\/div>", "transcribed_text": "Question 10 (15 points) NorthSouth Airlines has been granted permission to fly passengers between major IJS cities. The new company faces competition from four airlines that operate between the major cities. The betas of the equity of the four major competitors (A, B, C, D) are 1.63, 1.79, 1.97, and 213; and the debt-to-equity ratios of these four companies (in the same order: A 8, C, D) are 0.14, 0.30, 0.49, and Although these DIE ratios vary, all airline debt is rated the same. Suppose the yield on airline debt is 85%, the risk-free rate is 4.5% and the expected market risk premium (the average difference between the market return and the risk-free rate) is 7.5%. What is the cost of capital (or discount rate) in percentage that pu should use in valuing NorthSouth Airlines? (Allow two decimals in the percentage but do not enter the % sigm) You entered:", "related_book": { "title": "Elementary Statistics", "isbn": "321500245, 321500243, 978-0321500243", "edition": "11th Edition", "authors": "Mario F. Triola", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/1545.jpg", "uri": "\/textbooks\/elementary-statistics-11th-edition-1545", "see_more_uri": "" }, "free_related_book": { "isbn": "0130080691", "uri": "\/textbooks\/human-resource-management-8th-edition-9780130080691-210348", "name": "Human Resource Management", "edition": "8th Edition" }, "question_posted": "2024-06-11 05:26:21", "see_more_questions_link": "\/study-help\/questions\/business-management-leadership-2023-June-05", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/define-and-explain-how-to-determine-the-following-for-a", "description": "Define and explain how to determine the following for a convertible: conversion price, conversion value, straight bond value, floor value, and convertible premium?", "stars": 3 }, { "url": "\/study-help\/heat-and-mass-transfer-fundamentals-and-applications\/water-is-boiled-at-100c-by-a-spherical-platinum-heating-1123838", "description": "Water is boiled at 100C by a spherical platinum heating element of diameter 15 cm and emissivity 0.10 immersed in the water. If the surface temperature of the heating element is 350C, determine the...", "stars": 3 }, { "url": "\/study-help\/psychology\/compare-the-two-major-reasons-for-conducting-a-literature-review-1980026", "description": "Compare the two major reasons for conducting a literature review: as a basis for conducting your own research or as an end in itself.", "stars": 3 }, { "url": "\/an-advising-bank-presents-documents-to-you-for-payment-how", "description": "An advising bank presents documents to you for payment. How would you respond to each of the following discrepancies? Explain your answer. a. The letter of credit calls for an ocean bill of lading....", "stars": 3.5 }, { "url": "\/study-help\/questions\/5-gloddy-company-makes-three-products-in-a-single-facility-9778700", "description": "5. Gloddy Company makes three products in a single facility. These products have the following unit product costs: Products A B C Direct material $24.90 $25.70 $26.60 Direct labor (variable) $13.30...", "stars": 3.5 }, { "url": "\/study-help\/questions\/3-suppose-that-a-random-sample-of-200-twentyyearold-men-1139974", "description": "3. Suppose that a random sample of 200 twenty-year-old men is selected from a population and that their heights and weights are recorded. A regression of weight (measured in pounds) on height...", "stars": 3.5 }, { "url": "\/study-help\/questions\/whats-a-common-phrase-heard-from-teams-that-are-experiencing-1048928", "description": "What's a common phrase heard from teams that are experiencing some level of groupthink? \"Everyone needs to listen to the scrum master.\" \"Nobody likes a naysayer.\" \"We all agree, so we must be right.\"...", "stars": 3.5 }, { "url": "\/study-help\/questions\/davis-manufacturing-company-had-the-following-data-for-a-recent-830066", "description": "Davis Manufacturing Company had the following data for a recent year: January 1 December 31 Accounts receivable $27,000 $33,000 Materials inventory 22,500 6,000 Work in process inventory 70,200...", "stars": 3.5 }, { "url": "\/study-help\/questions\/a-dedicated-firewall-and-a-router-between-the-internet-and-901383", "description": "A dedicated firewall and a router between the Internet and the enterprise network secures the network. A three-part firewall topology also secures the network. Please compare these two approaches and...", "stars": 3.5 }, { "url": "\/study-help\/questions\/required-information-the-following-information-applies-to-the-questions-displayed-1856042", "description": "Required information [The following information applies to the questions displayed below.] Carmen Camry operates a consulting firm called Help Today, which began operations on December 1. On December...", "stars": 3.5 }, { "url": "\/study-help\/questions\/k-and-morty-5-s-maps-transformers-icin-ar-g-4619376", "description": "k and Morty 5. S... Maps transformers icin ar... G ctis learn - Google'... Online Onion Root.. a Amazon.com: LG UI... a Ama 4 90% + Opportunity Costs Practice For each of the following situations...", "stars": 3.5 }, { "url": "\/study-help\/questions\/among-450-randomly-selected-drivers-in-the-1618-agebracket-407-4981622", "description": "Among 450 randomly selected drivers in the 1618 agebracket, 407 were in a car crash in the last year. If a driver in that age bracket is randomlyselected, what is the approximate probability that he...", "stars": 3.5 }, { "url": "\/study-help\/management-and-cost-accounting\/explain-how-controllability-relates-to-responsibility-accounting-1541487", "description": "Explain how controllability relates to responsibility accounting?", "stars": 3.5 }, { "url": "\/study-help\/management-and-cost-accounting\/explain-how-the-choice-of-the-responsibility-centre-type-cost-1541478", "description": "Explain how the choice of the responsibility centre type (cost, revenue, profit or investment) affects budgeting. lop7", "stars": 3 }, { "url": "\/study-help\/management-and-cost-accounting\/define-responsibility-accounting-jiu8-1541479", "description": "Define responsibility accounting. jiu8", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/please-show-work-4-line-a-contains-the-points-3-2621397", "next": "\/study-help\/questions\/to-test-this-series-for-convergence-n1-3-you-2621399" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Finance", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-finance" }, { "name": " Question 10 (15 points) NorthSouth Airlines has been granted permission to", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/f-2621398" } ], "skill_details": { "skill_id": "13", "skill_name": "Finance", "parent_id": "1" } }}