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Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a 20% weight in equity,
Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a 20% weight in equity, 5% in preferred stock, and 75% in debt. The cost of equity capital is 12%, the cost of preferred stock is 10%, and the pretax cost of debt is 9%. What is the weighted average cost of capital for Ford if its marginal tax rate is 35%? O A. 6.92% B. 8.02% gh 0 C. 8.38% OD. 7.29%
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