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United Airlines is considering adding a new hub operation in Blue Lagoon. The finance group at UAL has gathered the following data. They have hired

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United Airlines is considering adding a new hub operation in Blue Lagoon. The finance group at UAL has gathered the following data. They have hired you as a Finance consultant to help them determine their cost of capital. Current stock sells at $30 per share with 30 million shares outstanding Debt of $1.8 billion was issued with a 4% coupon two years ago, and is now trading at 102 UAL pays an annual dividend of $2.40 this year, growing at 3% per year The current risk free rate is 2%, UAL's Beta is 1.5, the market return is 8% UAL pays a corporate tax rate of 21% a. What debt and equity weights will United use to calculate WACC? b. What is United's cost of debt? c. What is United's cost of common equity? d. What is United's WACC

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