Today is March 01, 2020. You were hired by a private local airline company. The company is planning to initiate a few new routes in the south of the United States. As a project manager you have been tasked with conducting a feasibility study and to make a recommendation to the CEO about whether or not to undertake this project. You have al ready estimated cash flows you would obtain from this project. You now need to estimate an appropriate discount rate to evaluate the NPV of this project. Given that your company is private, you look at competitors to calculate the discount rate. You decide that the main competitors are Delta Airlines, United Airlines, and Southwest Airlines. You believe that your equity cost of capital is equival ent to the average of the three airlines (see below for detailed instructions on how to estimate this equity cost of capital). Your company bonds with a coupon of 6% and 8 years to maturity are trading at $1048.30. These bonds pay semi-annual coupons. Your company has a debt-to-assets ratio of 0.25 , and you plan on maintaining this leverage ratio for the foreseable future. Tax rate is 34%. Using this information on the capital structure of your company, estimate the cost of capital that you would use as a discount rate for evaluating your project. You can use the average return on the S\&P 500 index over the past 5 years as the expected market return and current T-bill rate as the risk free rate. Follow the instructions below and create a spreadsheet similar to "Project 2 Example" posted on Canvas. A. Download monthly prices for each competitor stock (Delta, United, and Southwest) and the S\&P 500 Index for the past 5 calendar years (03/01/2015 through 03/01/2020). Data are available on Yahoo Finance (use Adj Close Price). Download monthly returns for the 3-month T-bill for the same time period from Using these data, cal culate betas for each of your stocks. (Use Excel Slope Function.) B. Estimate the cost of equity using CAPM. Assume that the beta for your airline company is the average of the betas for Delta, United, and Southwest airlines. Use average return on the S\&P500 index over the past 5 years as the expected market return and the current T-bill rate as the risk free rate. C. Estimate the cost of debt i.e., compute the yield-to-maturity for your bonds. (Use Excel function "IRR.") D. Compute WACC