Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Determine the WACC for Ford Motor Company (Ticker symbol F) Hint: The settlement date is the date when price information is retrieved. This term is

image text in transcribed

Determine the WACC for Ford Motor Company (Ticker symbol F) Hint: The settlement date is the date when price information is retrieved. This term is used in Excel bond "Price" and "Yield" calculations, interpreted as Today's Date." PART 1:Compute the cost of equity for Ford Motor Company using two different approaches - the DCF model and the CAPM. a. What is Ford's cost of equity if the T-bill rate is 2.5% and the market return is 16%? Please estimate beta value for the firm with 5-year monthly data (1/1/2014-12/31/2018) using data from yahoo finance website. b. Ford Motor paid an annual dividend of $0.60 in 2018. It is expected that the company will continue to pay dividend and dividend will grow at 7%. Given the market price of $8.70, what is the required rate of return for Ford's equity? You must also conduct regression analysis and paste your Summary Output into your answer sheet. R= T-bill Market return beta RE D1 Paste your regression results here. Determine the WACC for Ford Motor Company (Ticker symbol F) Hint: The settlement date is the date when price information is retrieved. This term is used in Excel bond "Price" and "Yield" calculations, interpreted as Today's Date." PART 1:Compute the cost of equity for Ford Motor Company using two different approaches - the DCF model and the CAPM. a. What is Ford's cost of equity if the T-bill rate is 2.5% and the market return is 16%? Please estimate beta value for the firm with 5-year monthly data (1/1/2014-12/31/2018) using data from yahoo finance website. b. Ford Motor paid an annual dividend of $0.60 in 2018. It is expected that the company will continue to pay dividend and dividend will grow at 7%. Given the market price of $8.70, what is the required rate of return for Ford's equity? You must also conduct regression analysis and paste your Summary Output into your answer sheet. R= T-bill Market return beta RE D1 Paste your regression results here

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Oxford Handbook Of Pricing Management

Authors: Ozalp Ozer, Robert Phillips

1st Edition

0199543178, 978-0199543175

More Books

Students also viewed these Finance questions