Business
Business, 20.12.2019 22:31, naomicervero

Assume ford motor company is discussing new ways to recapitalize the firm and raise additional capital. its current capital structure has a 25% weight in equity, 10% in preferred stock, and 65% in debt. the cost of equity capital is 13%, the cost of preferred stock is 9%, and the pretax cost of debt is 8%. what is the weighted average cost of capital for ford if its marginal tax rate is 40%?

a) 8.36 %
b) 8.00 %
c) 6.91%
d) 7.27%

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Answers: 3

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