Jet Blue Airlines:

Biggest difficulty in valuation is that there is no market

information
Beta must find a proxy for firms beta
For free cash flow valuation: terminal value, discount rate,
cash flows
Therefore must start off with a forecast for fcf method
We need NOPAT, depreciation, capex, working capital changes
Valuation: FCF Method Steps
1) Want WACC need weight of debt, weight of equity, cost of
debt, cost of equity, tax rate Assumptions a) relative valuation to get beta, value for equity
b) usually use target capital structure weights but using
market weights
Use Capm to get cost of equity,