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U the following information to calculate the WACC for Arsenal LLC. Debt: 9,000 6.2% coupon bonds...

  1. U the following information to calculate the WACC for Arsenal LLC.

  • Debt: 9,000 6.2% coupon bonds outstanding, with 20 years to maturity and a quoted price of 104. Those bonds pay interest semiannually
  • Common stock: 225,000 shares of common stock selling for $64.50 per share. The stock has beta of 0.85 and will pay a dividend of $2.70 next year. The dividend is expected to grow by 5% per year indefinitely
  • Preferred stock: 8,000 shares of 4.5% preferred stock selling at 94 per share
  • Market: A 12% expected return, a 5% risk free rate and 35% tax rate
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