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Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a 35% weight in equity,
Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a 35% weight in equity, 5% in preferred stock, and 60% in debt. The cost of equity capital is 18%, the cost of preferred stock is 12%, and the pretax cost of debt is 9%. What is the weighted average cost of capital for Ford if its marginal tax rate is 25%? O A. 11.5% B. 10.95% C. 12.05% D. 12.59%
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