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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 10% weight in equity,
Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a 10% weight in equity, 20% in preferred stock, and 70% in debt. The cost of equity capital is 17%, the cost of preferred stock is 9%, and the pretax cost of debt is 7%. What is the weighted average cost of capital for Ford if its marginal tax rate is 40%? O A. 6.76% OB. 6.12% O C. 7.08% OD. 6.44%
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