The market value of Fords' equity, preferred stock, and debt are $7 billion, $1 billion, and $12 billion, respectiv
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The market value of Fords' equity, preferred stock, and debt are $7 billion, $1 billion, and $12 billion, respectiv
The market value of Fords' equity, preferred stock, and debtare $7 billion, $1 billion, and $12 billion, respectively. Fordhas a beta of 1.7, the market risk premium is 6%, and therisk-free rate of interest is 4%. Ford's preferred stock pays adividend of $4 each year and trades at a price of $25 per share. Ford's debt trades with a yield to maturity of 8%. What is Ford'sweighted average cost of capital if its tax rate is 30%?