The market value of​ Fords' equity, preferred stock and debt are $ 6 ​billion, $ 2 ​billion, and $ 12 ​billion, respectively. Ford has a beta of 1.8​, the market risk premium is 8​%, and the​ risk-free rate of interest is 4​%. ​ Ford's preferred stock pays a dividend of $ 2.50 each year and trades at a price of $ 25 per share. ​ Ford's debt trades with a yield to maturity of 10​%. What is​ Ford's weighted average cost of capital if its tax rate is 40​%?

Answers

Answer 1

Answer:

10.12 %

Explanation:

Weighted Average Cost of Capital (WACC) is the cost of permanent sources of capital pooled together. It shows the risk of the business and is used to evaluate projects.

WACC = Cost of equity x Weight of Equity + Cost of Debt x Weight of Debt + Cost of Preference Stock x Weight of Preference Stock

Remember to use the After tax cost of debt :

After tax cost of debt = Interest x (1 - tax rate)

                                    = 10​% x ( 1 - 0.40)

                                    = 6.00 %

Cost of equity :

Cost of equity = Return from Risk free security + Beta x Risk Premium

                        = 4.00 % + 1.8 x 8.00%

                        = 18.40 %

Cost of Preference Stock :

Cost of Preference Stock  = Dividend / Market return x 100

                                            = $2.50 / $ 25 x 100

                                            = 10%

therefore,

WACC = 18.40 % x 30 % + 6.00 % x 60 % + 10.00% x 10%

           = 10.12 %

thus,

Ford's weighted average cost of capital is 10.12 %


Related Questions

Phyllis graduated with a degree in chemistry and started her career as a laboratory scientist with Dow Chemical. While at Dow, she met a sales representative from PPG Industries who suggested she might enjoy an opportunity to work directly with customers and assist them by answering product questions, making recommendations about new products and serving as an assistant to the field sales team. Phyllis applied for the position and is now working at PPG. She enjoys the opportunity to use her technical skills to assist customers and doesn't mind being on the phone or answering e-mails from customers. What type of sales channel is Phyllis working in

Answers

Answer: Inside selling

Explanation:

Based on the information given in the question, the sales channel that Phyllis is working in is the inside selling.

inside selling refers to the act of selling goods to the customers through phone or online rather than meeting the customers in person. Inside sales makes use of the phone, internet and emails to reach out to the customers.

________ are programs where the government provides a tax deduction for spending on health insurance and other benefits by both employers and employees.

Answers

Answer:

Tax expenditures

Explanation:

Tax expenditures refer to the special kind of the provision like exclusion, deductions, credit, rate of the tax that would give the benefit for the particualr activities or the taxpayer group.

It is a program where the government give the tax deduction with respect to the amount spend on the health insurance and the other benefits

Gidgits Galore's chimney stacks emit significant amounts of smoke into the air, and residents have complained about the poor air quality since the factory began operating. The EPA and state Attorney General can bring suit against Gidgits Galore for spowing fumes into the air False or True

Answers

Answer:

Could be True or False.

Explanation:

True if Gidgits is breaking any EPA/State regulations. False if they are in complete compliance with the law.

Whats your favorite Song guys

Answers

gravity ft. tyler the creator

Memories by Maroon 5. I love this song.

what does it mean to be intelligent?

Answers

Answer:

Intelligence has been defined in many ways: the capacity for logic, understanding, self-awareness, learning, emotional knowledge, reasoning, planning, creativity, critical thinking, and problem-solving.

Answer:

It means to know certain subjects and items.

Explanation:

6
Drag each label to the correct location,
A factory producing steel goods has many assets. Classify them as tangible or intangible.
intangible asset
tangible asset
Swiveling chair
factory
cash
bulldozer
patent
intellectual property

Answers

Answer:

The top four is tangible and the both four are intangible I am quite sure.

Explanation:

Benefits of having a strong brand image

Answers

Answer:

benefits of building and maintaining a strong brand are endless: customer recognition, word-of-mouth marketing, customer loyalty, enhanced credibility, and ease of purchase, to name a few. Your brand is one of your company's most valuable assets.

consideran que las costumbres y tradiciones deben mantenerse ala nueva generación​

Answers

Answer:

Efectivamente, considero que las costumbres y tradiciones deben mantenerse en las nuevas generaciones, pues forman parte de la idiosincrasia y la identidad de un pueblo, sociedad o nación. De esta manera, a través del mantenimiento de estas costumbres y tradiciones, las nuevas generaciones seguirán sintiendo una especial pertenencia a su patria, y mantendrán un vínculo que los ligará con esta y con sus compatriotas, puesto que las costumbres y tradiciones son parte esencial de la identidad de una nación.

One of the determinants of employees' willingness to exert effort is the degree to which they value the rewards offered by the organization.

Answers

Answer:

True.

Explanation:

An employee can be defined as an individual who is employed by an employer of labor to perform specific tasks, duties or functions in an organization.

Basically, an employee is saddled with the responsibility of providing specific services to the organization or company where he is currently employed while being paid a certain amount of money hourly, daily, weekly, or monthly depending on the contractual agreement between the two parties (employer and employee).

Hence, while an employer may be the owner of a business firm or company, an employee is a subordinate employed to provide unwavering services to the employer while also, being professional and diligent at all times.

An equality norm refers to a reward system in which the employer or human resource manager decide to compensate or pay the entire workforce the same amount of money without discrimination or favoritism.

Basically, it's paid regardless of individual productivity levels, in order to promote the ability to work effectively in groups.

However, one of the determinants of employees' willingness to exert effort is the degree to which they value the rewards offered by the organization. These rewards usually includes salary, overtime, transportation (car), house, pension, healthcare, allowances, etc.

Hence, the willingness of an employee to put in his best at his place of work by exerting more effort, is largely dependent on the reward system designed and being implemented in the organization.

For example, an employee who's given an official car with a driver, apartment, healthcare and work bonus is more inclined to perform excellently and loyal to his employer.

state any five occupation in public service sector and explain at one​

Answers

Answer: Some occupation in government organizations are Mental health therapist, substance abuse counselor, financial case worker, developmental disabilities specialist, public health nurse.

Explanation:

There so many occupation in government organizations, which all work together for the functionality of the society, here are a few;

- Mental health therapist.

- Substance abuse counselor.

- Financial case worker.

- Developmental disabilities specialist.

- Public health nurse.

Public health nurses are nurses who work in government owned hospitals,carrying out their basic roles, and ensuring they do it well treating all patient with fairness and equality.

pleaseeeeeeee helpppppppp Which of the following media representatives would most likely meet with a celebrity fashion designer to preview her Fall collection in July?

the art director of an online fashion magazine
the advertising chief of a celebrity gossip magazine
the editor-in-chief of an international fashion magazine
the author of a fashion blog

Answers

I feel like the answer may be the art director of an online fashion magazine but I could be wrong ><

What is the main difference between renting and leasing?
A Leasing is month to month.
B. You do not have any rights when you rent.
When you lease you normally have a longer term contract and can't move
C.
out early without paying big penalties.
D. When you rent you have ownership in the apartment.

Answers

Answer:

C-When you lease you normally have a longer term contract and can't move

out early without paying big penalties.

Explanation:

The difference between lease and rent is that a lease generally lasts for 12 months while a rental agreement generally lasts for 30 days

WILL MARK BRAINLIEST

From the given balances, find the total of the debit and credit side of the balance sheet.

Answers

Answer:

I think the answer is C

HOPE IT HELPED

AND SORRY IF ITS WRONG

FIVE SIX SEVEN EIGHT________.

Answers

Answer:

I demand a chocolate shake? mm chocolate shakeeeee

Explanation:

Answer:

9

Explanation:

Obviously

George walks in and wants to send multiple back to back transactions to the
same person after asking some "Know Your Customer" questions, you find
out the receiver sells homeopathic remedies directly to customers. They're
dirt cheap! The receiver was very thorough with the instructions for sending
the payment information, so George feels confident.
Are there any Red Flags? If so, please select all that apply:

Answers

Answer: The Sender and Receiver don't know each other

Sending money for what sounds like a too good to be true

The purpose of transaction for online goods is questionable

Explanation:

The statement "The sender & receiver don't know each other, money send for sounds like very good to be true dealing, and the motive of the transactions with respect to the online goods is considered to be questionable" is considered to be the red flag.

The sender i.e. Geroge who not even know the receiver that sells the homeopathy remedies online so this could raise a few issues but it is not to be considered very serious for red-flagged:

Since e-commerce arises each and every time that lies between non-known parties online.

This is due to the dirt chape that could make it suspicious also they don't know each other so this should be considered red-flagged.

The instructions with regard to the payment do not represent any signal of reliability and truthfulness so might me the receiver is trustworthy and genuine.In the case when the homeopathy remedies do not have the licensing and permissions so it would become questionable.

No one could suggest the specific brand of homeopathy as it becomes nonprofessional and non-appropriate, so the last option is not be considered.

Therefore we can conclude that The statement "The sender & receiver don't know each other, money send for sounds like very good to be true dealing, and the motive of the transactions with respect to the online goods is considered to be questionable" is considered to be the red flag.

Learn more about homeopathy here: brainly.com/question/7460064

If Jason can wash a car in 20 minutes and wash a dog in 10 minutes and Megan can wash a car in 15 minutes and wash a dog in 15 minutes, which of the following statements is true? a. Megan can wash two cars in the time it takes Jason to wash a dog. b. The opportunity cost of washing a car is one dog bath for Jason. c. The opportunity cost of washing a car is greater for Megan. d. Jason has both a comparative and an absolute advantage in washing a dog. e. The opportunity cost of washing a dog is lower for Megan.

Answers

Answer:

d. Jason has both a comparative and an absolute advantage in washing a dog.

Explanation:

Comparative advantage in economics is the ability of an individual or country to produce a specific good or service at a lower opportunity cost better than another individual or country.

The comparative advantage gives a country a stronger sales margin than their competitors as they are able to sell their specific products or render their peculiar services at a lower opportunity cost.

In 1817, David Ricardo who is an english political economist talked about the law of comparative advantage in his book “On the Principles of Political Economy and Taxation."

Also, the principle of comparative advantage asserts that countries can become better off by specializing in what they do best.

This simply means that, any country applying the principle of comparative advantage, would enjoy an increase in output and consequently, a boost in their Gross Domestic Products (GDP).

An absolute advantage can be defined as the ability of an individual such as a producer to produce a good or provide a service in larger (greater) quantity for the same amount of money or the same quantity at a lesser cost or time. Thus, it's the superior capability of an individual over another using the same resources.

Hence, the statement which is true is that, Jason has both a comparative and an absolute advantage in washing a dog because he washes it in 10 minutes while it would take Megan 15 minutes.

1. Describe the features available through online banking.
2. Discuss the advantages of doing your banking online,
3. Discuss the disadvantages of doing your banking online.
4. What is identity theft and how does it connect to online banking?
5. What measures can you employ to make your online banking safe and efficient?
6. What types of services do you see in the future for online banking?
7. Describe the purpose of the Electronic Funds Transfer Act.
8. How can banks be competitive in the features offered through online banking?

Answers

Answer:

wait can i ask somebody to help you

Explanation:

Nathan is analyzing the demand for baseball bats that illuminate when they hit something. The managing director of his company has asked him
to understand the type of need that exists for such a product. What are the two types of needs that Nathan should consider?
Nathan should consider the
B and
needs that would exist for a self-illuminating baseball bat.
Reset
Next

Answers

Answer:

Isuzu trooper the intended addressee please notify the best of

PLEASE HELP, I WILL MARK BRAINLIEST!!! define/describe the following terms. note what the advantages and disadvantages of each are (from a worker's perspective). here are the following terms: contracting, consulting, entrepreneurship

please no links, this is due tommorow!!!​

Answers

The advantages of entrepreneurship include the ability to shape one's own business, control of one's own working habits, and significant stock in the venture. Disadvantages include a lack of guarantee of success and the heightened responsibility of owning a business. Higher take-home pay.
Tax relief on business expenses.
Greater opportunity for tax planning.
Total control of your business and name.
One company for all your business interests.
Limited liability and protection of personal assets.

QUESTION 1 of 10: All employers in the U.S. pay "payroll taxes" on behalf of employees. The Medicare portion of this is 1.45% of pay. If an
employee makes $480 in a week, how much does the employer contribute for Medicare?
a) $1.45
b) $6.96
c) $69.60
d) $696

Answers

The answer is letter B
The answer is 1.45- B

Green Landscaping is completing work for a contract client that is billed when work is completed. At the year-end, Green had completed $250 of landscaping services that were unbilled and unrecorded. The entry to record this adjustment will include which of the following entries: (Check all that apply). Multiple select question. a debit to unearned service fees a credit to unearned service fees a debit to service fees earned a credit to accounts receivable a credit to service fees earned a debit to accounts receivable

Answers

Answer:

a debit to accounts receivable

a credit to service fees earned

Explanation:

Based on the information given we were told that $250 of landscaping services which were unbilled and unrecorded was completed at year end which means that The appropiate journal entry to record this adjustment will include which of the following entries:

a debit to accounts receivable

a credit to service fees earned

you purchased one hundred shares of AT&T stock. The company pays 20 cents per share to each share holder (That’s you!) at the end of this quarter. This money is called

Answers

Answer:

Dividends

Explanation:

WILL MARK BRAINLIEST

Which of the given items are examples of tangible and intangible fixed assets, respectively?

____ is a tangible fixed asset, while _____
is an example of an intangible fixed asset.


Blank 1
A. Equipment
B. Mortgage loan
C. Cash

Blank 2
A. Accounts receivable
B. Copyrights
C. Inventory

Answers

Answer:

I think blank 1- is B but not sur.

Hoping you have a good day

ty ur a life saver.

.

.

.

.

.

:D

Franklin transferred 952 photos from his phone in 17 minutes. At what rate does his phone transfer photos?

Answers

Answer:

56 photos per minute

Explanation:

952 divided by 17 is 56

Appropriate body language during a presentation includes

A. Avoiding eye contact with the audience
B.Dressing as formally as possible
C.Avoiding unnecessary movements.
D. Refraining from any facial expressions.

HELP ASAP

Answers

Answer:

B

Explanation:

I GIVE BRAINLIEST! ASAP!!!!

What actions can the government and central bank take to ensure the economy stays regulated?

Answers

Answer:

The government can influence interest rates, print money, and setting bank reserve requirements are all tools central banks use to control the money supply. Other tactics central banks use include open market operations and quantitative easing, which involve selling or buying up government bonds

When lifting, you should use what part of your body to do most of the lifting?

Answers

Thighs, upper arms, and shoulders. Most are legs.

Answer:

You should use your legs to do most of the lifting

Explanation:

Your legs are many times stronger than your back muscles. Let your strength work in your favor. Again, lower yourself to the ground by bending your knees, not your back.

consequences of migration on the receiving country​

Answers

Answer:

Economic growth

 Migration boosts the working-age population.  Migrants arrive with skills and contribute to human capital development of receiving countries. Migrants also contribute to technological progress. Understanding these impacts is important if our societies are to usefully debate the role of migration.

A bookstore costs $90 a day to keep open, and spends $12 for each book it sells. The store charges $18 for each book it sells. If n represents the number of books sold, which equation represents the cost function for this bookstore?
O A. C = 90n + 15
O B. C = 12n + 90
O C. C = 18n + 90
O D. C = 90n + 12​

Answers

Answer:

The correct answer is B just got it right on ape

Explanation:

Hayden works with flammable chemicals in his career in a perfume factory. Based on that information, which of the following conditions might warrant his higher wage. decision making stress level supervision danger or risks

Answers

The condition that might warrant his higher wage is the danger or risks present in the workplace.

What is the condition of the workplace?

The condition of the workplace present a high hazard because of the  flammable chemicals that can cause serious accident

Hence, the condition that might warrant his higher wage is the danger or risks present in the workplace.

Therefore, the Option D is correct.

Read more about high hazard

brainly.com/question/14367881

Answer:

D

Explanation:

ill give every answer when im finish dont delete me

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