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The market value of Fords' equity, preferred stock, and debt are 56 billion, $2 billion, and $14 billion, respectively. Ford has a beta of 1.1,
The market value of Fords' equity, preferred stock, and debt are 56 billion, $2 billion, and $14 billion, respectively. Ford has a beta of 1.1, the market risk premium is 6%, and the risk-free rate of interest is 4%. Ford's preferred stock pays a dividend of $3 each year and trades at a price of $28 per share. Ford's debt trades with a yield to maturity of 7.5%. What is Ford's weighted average cost of capital if its tax rate is 30%? O A. 8.65% O B. 7.21% O C. 7.93% OD. 7.57%
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