Question
1) Ford motor company has a beta of 1.08. If the expected return on the market is 8.5%, and the risk free rate is 1.4%,
1) Ford motor company has a beta of 1.08. If the expected return on the market is 8.5%, and the risk free rate is 1.4%, what is the cost of equity capital according to the CAPM?
Please list answers to two decimal places (9.99%).
2) Your company has preferred stock currently selling for $79.93 on the New York Stock Exchange (NYSE). If the stock paid a dividend of $2.22 last year, what is the cost of preferred stock to your company?
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Corporate Financial Management
Authors: Glen Arnold, James Pickford
2nd Edition
0582821762, 978-0582821767
