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Homework answers / question archive / The market value of Fords' equity, preferred? stock, and debt are $7 ?billion, $1 ?billion, and $14 ?billion, respectively

The market value of Fords' equity, preferred? stock, and debt are $7 ?billion, $1 ?billion, and $14 ?billion, respectively

Finance

The market value of Fords' equity, preferred? stock, and debt are $7 ?billion, $1 ?billion, and $14 ?billion, respectively. Ford has a beta of 1.3?, the market risk premium is 8?%, and the?risk-free rate of interest is 4?%. ? Ford's preferred stock pays a dividend of $2 each year and trades at a price of $25 per share. ?Ford's debt trades with a yield to maturity of 8.5?%. What is?Ford's weighted average cost of capital if its tax rate is 25?%?

A. 9.9?%

B. 9?%

C. 10.8?%

D. 9.45?%

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