Objective: to estimate the risk parameters for your company and use these parameters to estimate costs of equity and capital for Ford Motor Comapany

1) Looking at the stock price history of your company, evaluate both its riskiness and its performance as an investment and relative to the market.

2)Develop a measure of equity risk in the company and compute the corresponding cost of equity (use the regression approach to estimating beta). If the firm is in multiple businesses and regions, estimate the cost of equity for each.

3) Develop or find a measure of default risk in the company and compute a cost of debt for it (you can use multiple methods including the synthetic rating method).

4) Based on the mix of debt and equity used by the company, estimate an overall cost of capital for the company.