Ford weighted average cost of capital, Accounting Basics

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Ford weighted average cost of capital

Problem:

The market value of Ford's equity, preferred stock, and debt are 7billion, 3billion, and 10billion respectively. Ford has a beta of 1.8, market risk premium is 7%, and the risk-free rate of interest is 4%. Ford's preferred stock pays a dividend of $3.5 each year and trades at a price of $27 per share. Ford's debt trades with a yield to maturity of 9.5%.

Required:

Question: What is Ford's weighted average cost of capital if its tax rate is 30%?

10.12
10.34
11.08
11.47
11.83

Note: Explain in detail and show all computations in proper way.

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Accounting Basics: Ford weighted average cost of capital

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Accounting Basics: Ford weighted average cost of capital

Reference No:- TGS0892159

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Recent Questions Asked Accounting Basics

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Accounting Basics: Ford weighted average cost of capital

Reference No:- TGS0892159

Recent Questions Asked Accounting Basics

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Q : Ford weighted average cost of capital

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