Use the Following datat to create a WACC for Father Graham, Inc. Justify your choices

Current T$-$Bill Yield $0\%$

Curent $30$ Year Treasury Yield $3\mathrm{.}20\%$

Historical Arithmetic Average T$-$Bill Return $3\mathrm{.}77\%$

Historical Arithmetic Average $30$ Year Treasury Return $5\mathrm{.}79\%$

Historical Geometric Average T$-$Bill Return $3\mathrm{.}72\%$

Historical Geometric Average $30$ Year Treasury Return $5\mathrm{.}42\%$

Historical Arithmetic Average of S&P$500$ less T$-$Bill Return $6\mathrm{.}56\%$

Historical Geometric Average of S&P$500$ less T$-$Bond Return $4\mathrm{.}39\%$

Market Value of Debt $$275,000,000$

Book Value of Debt $$300,000,000$

Book Value of Equity $$450,000,000$

Current Stock Price $$65$

Shares Outstanding $10,000,000$

Marginal corporate Tax Rate $25\%$

Levered Beta $1\mathrm{.}7$

Unlevered Beta $1\mathrm{.}31$

Yield to Maturity on Firm$$s Debt $7\%$

Coupon Rate on Firm$$s Debt $6\%$

Answers $(3$ pts per box$)$

Risk Free $3\mathrm{.}77\%$

Market Risk Premium

Beta

Cost of Equity

Cost of Debt

Weight of Debt

Weight of Equity

$8$ pts

WACC