Long-term treasury bonds and corporate bonds

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Alaska airlines fundamental analysis is to be done as 12/31/2011. At that time, they had 35,474,775 shares of stock outstanding and 2,391,747 shares in treasury stock. With the annual report for 2011, Alaska Airlines stated that they have not paid a dividend in twenty years and had no intention to commence one in the near future. The stock price was $75.09. Long-term treasury bonds offered 2.55% and long-term corporate bonds with their credit rating offered 6.21%. Assume the market risk premium is 8.70%. Also, assume that all of the debt can be considered to be in the form of a 6.75% coupon bond that was issued on 02/15/2006 and will mature on 02/15/2021. The best estimate of the beta is 0.89. Corporate tax rate is 38%

Need the Weighted Average Cost of Capital

Please work in excel and show your work.

Reference no: EM131915839

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