Part C:Discussion of Fords capital structure. You will review Fords consolidated financial statements. You will calculate the companys debt/equity ratio and earnings per share. You will also determine the companys return on investment and weighted average cost of capital.

Requirements:

Step 1:Review the form 10K, item 15, to determine Fords capital structure. From the consolidated balance sheet, what kinds of stock has Ford issued?

Step 2:Read note 24. CAPITAL STOCK AND AMOUNTS PER SHARE. What is the meaning of Earnings per share and diluted earnings per share? Share your comments with your classmates in Discussion 3.3.

Step 3:Calculate the debt/equity ratio. Use all long-term debt in your calculation. Compare your answer to publicly available information. Share your analysis with your classmates in Discussion 3.3.

Step 4:Calculate the Earnings per Share. Compare your answer to publicly available information. Share your analysis with your classmates in Discussion 3.3.

Step 5: Determine the companys return on investment. Compare your answer to any website listed in the directions. Share your analysis with your classmates in Discussion 3.3.

Step 6:Determine the companys weighted average cost of capital. Compare your answer to any of the websites listed in the directions. Share your analysis with your classmates in Discussion 3.3.

Step 7:Comment on whether the firms capital structure is optimal.