Problem 2 You have been asked to calculate the cost of equity for three firms-BlastAir, LandAir, and BalAir. You know the following: Beta Cost of Debt Debt/Assets BlastAir 1.35 4.5% 55% LandAir 1.30 5.25% BalAir 1.33 33% 47% 5.4% You know the following: - 10-year Treasury yield = 4.40% - market premium = 5.5% - average tax rate = 21% What are the expected returns on equity and WACCs for each of these firms? B C D Cost of Equity Rp Beta Market Premium Equity Cost BlastAir Landair BalAir Cost of Debt Debt/Assets Ra BlastAir Landair BalAir Weighed Average Cost of Capital WACC BlastAir Landair BalAir Tax rate