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please help! 27 Assume the market value of Ford's equity, preferred stock and debt are $8 billion, $3 billion and $10 billion respectively. Ford has
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27
Assume the market value of Ford's equity, preferred stock and debt are $8 billion, $3 billion and $10 billion respectively. Ford has a beta of 1.5 , the market risk premium is 7% and the risk - free rate of interest is 5%. Ford's preferred stock pays a dividend of $5 each year and trades at a price of $25 per share. Ford's debt trades with a yield to maturity of 10%. What is Ford's weighted average cost of capital if its tax rate is 25% ? A. 11.07% B. 10.46% C. 12.3% D. 11.69%Step by Step Solution
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