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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 25% weight in equity,
Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a 25% weight in equity, 15% in preferred stock, and 60% in debt. The cost of equity capital is 13%, the cost of preferred stock is 8%, and the pretax cost of debt is 7%. What is the weighted average cost of capital for Ford if its marginal tax rate is 35%?
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