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attached is 3 files with info on homework question which is 300-400 words in length, , It is the ford company capital budgeting promblem Ford
attached is 3 files with info on homework question which is 300-400 words in length, , It is the ford company capital budgeting promblem
Ford Company Capital Budgeting Project\": Mini-case You are provided with the following information to determine Ford's weighted average cost of capital that will be used for capital project calculations. As a Finance Analyst for Ford, you will calculate and support the development of its weighted average cost of capital and communicate it to the CFO of Ford. After you have calculated the required data points in the two tables below, provide a brief paper (approximately 300 to 400 words) to the CFO summarizing the weighted average cost of capital you determined for Ford, where they may be risks in the calculation (how the calculation may change over time), how the weighted average cost of capital you calculated should be applied when making cost of capital project decisions, and some scenarios that the CFO should be aware of that may change the weighted average cost of capital at some future point. Your discussion of the scenarios should cover aspects of management, marketing and broader economic factors that may influence the weighted average cost of capital. Financial Management Ford Company Capital Budgeting Problem The market value of Fords' equity, preferred stock and debt are $7 billion, $3 billion, and $10 billion, respectively. Ford has a beta of 1.8, the 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%. What is Ford's weighted average cost of capital if its tax rate is 30%? Ford Company Market Capitalization Weight Equity (E) Preferred (P) Debt (D) Total Ford Company Weight After-tax Marginal Weight Cost Equity (E) Preferred (P) Debt (D) X X X = = = Total X = Description of Case & Identifying the Issue Points: Links to Course Readings and Additional Research Points: Depth of Analysis Points: 15 (15%) Concisely describes the case, and summarizes and identifies all major issues in the case. 15 (15%) In analyzing the case, the author does excellent research into the problems/questions with clearly documented links to the material read in class and several additional relevant references. 30 (30%) The analysis is detailed with insightful review on both operational and strategic aspects of the case. Solutions & Strategies Points: 20 (20%) Well documented reasoned and excellent solutions to all issues in the case study; proposed solutions is implementable. APA formatting Points: 10 (10%) All resources and references are correctly cited using APA formatting, in both in paper and bibliography Writing Clarity & Quality Points: 10 (10%) Writing is clear, concise, and professional in style. No spelling or grammar errorsStep by Step Solution
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