Arbitrage Computer is a developer of nanoscale transistor design for computer processors. Arbitrage Computer is funded with a capital structure consisting of $60,000,000 of long-term debt, $140,000,000 of common equity, and $4,000,000 of preferred stock. The stock of Arbitrage Computer recently reached a 52-week high of $132.45 and currently sells for $120.07. Arbitrage Computer is a dividend paying firm and paid a dividend last year in the amount of $3.40. The corporation can issue new common stock with a 4% flotation cost. Their preferred stock pays a dividend of $6.50 per share, and new preferred stock could be sold at a price to net the company $152.60 per share (inclusive of flotation costs). Security analysts are projecting that the common dividend will grow at a rate of 4% a year. The firm can issue additional long-term debt at an interest rate of 4.80%, and its marginal tax rate is 21%. The risk-free rate is 1.11% and the market risk premium is 3.57%. Arbitrage Computer has a beta equal to 1.55.

1. Calculate the capital structure weights for Amount funded with long-term debt, amount funded with short-term debt, amount funded with common equity, amount funded with preferred stock. Then calculate Wd, Wsd, Wps, and Ws

2. Calculate the weighted average cost of capital assuming internal equity and calculate the weighted average cost of capital assuming new external equity. Perform the calculations for both the dividend growth and CAPM methods