The market value ofFords' equity, preferredstock, and debt are $6 billion, $2 billion, and $10 billion, respectively. Ford has a beta of 1.1, the market risk premium is 8%, and therisk-free rate of interest is 4%. Ford's preferred stock pays a dividend of $2 each year and trades at a price of $29 per share. Ford's debt trades with a yield to maturity of 7.5%. What isFord's weighted average cost of capital if its tax rate is 40%?<\/p>
A.<\/strong><\/p> 9.04%<\/p> B.<\/strong><\/p> 8.29%<\/p> C.<\/strong><\/p> 7.53%<\/p> D.<\/strong><\/p> 7.91%<\/p>",
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