The cost of equity capital reflects minimum required return investors can expect on a firm's stock. The cost of equity compensates owners for the company's systematic risk as measured by beta. Recall that the cost of equity is also a component of the weighted average cost of capital (WACC), which reflects the fair value return of the firm's assets. WACC is the hurdle rate used to evaluate capital investment projects in the net present value (NPV) calculation. Beta is the key measure in determining a firm's cost of equity and is determined by performing a CAPM regression of historical stock returns (risk premium) vs. that of the market. What if the firm is privately held or recently went public and has a very short return history that is insufficient to obtain a meaningful CAPM regression? Your assignment is to determine the beta, cost of equity capital, and WACC for Wheels Up Experience Inc. (ticker UP), which recently went public July 2021. To do this, you need to use the following comparable proxy companies and market assumptions: Allegiant Travel Co. (ALGT) Hawaiian Holdings (HA) Southwest Air (LUV) American Airlines (AAL) Delta Airlines (DAL) United Airlines (UAL) Air Canada (ACDVF) Alaska Air (ALK) Capital Market Assumptions Risk free rate = 2.5% Market return = 8.75% Corporate tax rate = 25% Debt beta: come up with your own estimate based on the class. discussion and the research article provided in Canvas. Outline your methodology. Use the latest financial data of these comparable firms, which can be found in the following sources: Value Line, Bloomberg, Yahoo Finance. Make sure you cite the source in your submission. For the proxy firms, use the betas from these sources rather than perform CAPM regressions. Your submission is to be uploaded as an Excel file in Canvas. The file must contain a table showing the financial data and source citations, and methodology. Do not hard code calculations in the table. These should be expressed as formulas.