The Market Value of Fords' Equity,preferred Stock and Debt Are

question 101

Multiple Choice

The market value of Fords' equity,preferred stock and debt are $8 billion,$4 billion and $12 billion respectively.Ford has a beta of 1.3,the market risk premium is 7% and the risk-free rate of interest is 4%.Ford's preferred stock pays a dividend of $4 each year and trades at a price of $30 per share.Ford's debt trades with a yield to maturity of 8.5%.What is Ford's weighted average cost of capital if its tax rate is 30%?

• A)8.01%
• B)8.34%
• C)9.46%
• D)9.56%

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Definitions:

Muscle Wasting

The gradual decline in muscle mass and strength, often due to disease, malnutrition, or lack of use.

Paralysis

The loss of the ability to move and sometimes to feel anything in part or most of the body, typically as a result of illness, poison, or injury.

Cerebral Palsy

A neurological disorder caused by a non-progressive brain injury or malformation that occurs while the child's brain is under development, affecting muscle coordination and movement.

Simple Reflex Action

An automatic, involuntary physiological response to a specific stimulus that does not involve conscious thought.