1. In 2006, the major airline carriers, with the principal exception of Southwest Airlines (LUV), continued to be in dire financial condition following the attack on the World Trade Center in 2001.

1. Given the following data for Southwest Airlines and three other airlines (for November 28, 2006), estimate the unlevered equity beta for Southwest Airlines. You may assume a 38% tax rate in your calculations.

Company Name	Levered Equity Beta	Debt/Equity Capitalization	Assumed Debt Beta
American Airlines (AMR)	3.2400	205.16%	0.30
Delta Airlines (DALR.PK)	4.0500	5,663.67%	0.40
Jet Blue (JBLU)	-0.1100	106.22%	0.30
Southwest Airlines (LUV)	-0.0100	14.93%	0.20

b. Based on your estimate of Southwest Airliness unlevered equity beta, relever the beta to get an estimate of the firms levered beta.