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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 15% weight in equity,
Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a 15% weight in equity, 25% in preferred stock, and 60% in debt. The cost of equity capital is 16%, 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 30%? OA. 7.59% OB. 7.21% C. 7.97% OD. 8.35%
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