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The market value of Fords' equity, preferred stock, and debt are $8 billion, $2 billion, and $15 billion, respectively. Ford has a beta of 1.6,
The market value of Fords' equity, preferred stock, and debt are $8 billion, $2 billion, and $15 billion, respectively. Ford has a beta of 1.6, the market risk premium is 6%, and the risk-free rate of interest is 5%. Ford's preferred stock pays a dividend of $3 each year and trades at a price of $29 per share. Ford's debt trades with a yield to maturity of 9%. What is Ford's weighted average cost of capital if its tax rate is 30%? O A. 9.28% OB. 11.14% O c. 10.21% OD. 9.74%
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