User Account

All Pages

What is the weighted average cost of capital for ford

Assignment Help Financial Accounting
Reference no: EM132499677

Question 1: Assume Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a 30% weight in equity, 10% in preferred stock, and 60% 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%?

Option 1: 8.00%

Option 2: 6.91%

Option 3: 7.68%

Option 4: 8.36%

Reference no: EM132499677

Questions Cloud

Conduct a general survey outside of school : Conduct a general survey outside of school on anyone you wish - Perform this as an inspection only and document the findings in short phrases.
Calculate the expected rate of return of stock a : Stock A has beta coefficient 0.73.calculate the expected rate of return of stock A given that the risk free rate is 0.3 and the annual market rate return is 0.1
Explain the relationship between dividends and stock prices : Discussion about dividend yield and dividend payout ratio. Link in your answer a discussion of profits and retained earnings with dividends.
Describes relationship between returns of two companies : Which statement describes the relationship between the returns of the two companies? Two companies operate in the same industry
What is the weighted average cost of capital for ford : 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%?
Explain time value of money related to client investment : Explain the of time value of money related to your client's investments by describing the concepts of PV, FV, and annuities to demonstrate the benefits.
What will the cash flows for this project be during year 2 : The firm's marginal tax rate is 40 percent. What will the cash flows for this project be during year 2?
What is high growth standard deviation of return : High Growth's annual stock returns over the last 7 years are: 27%, -18%, 34%, 11%, -28%, 75%, and -25%. What is High Growth's standard deviation of return?
What is the irr of the better project : The company's WACC is 10.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.)

Reviews

Write a Review

Financial Accounting Questions & Answers

  Susceptible to earnings management manipulation

A company accounts for Inventories on a FIFO basis. Compared to LIFO, is FIFO a more balance-sheet oriented approach to accounting for inventory, or is it a more income- statement approach? Explain.  Generally, is FIFO or LIFO more susceptible to ear..

  Total materials variance and price and quantity variances

The standard cost of Product B manufactured by MIT Company includes 2.40 units of direct materials at $5.20 per unit. During June, 27,400 units of direct materials are purchased at a cost of $5.09 per unit, and 27,400 units of direct materials are us..

  Management report included in annual report to shareholder

Management reports have been a prominent topic the past few years. The term “Management Reports” can be understood in a variety of different contexts and applications. A management report is also included in the annual report to shareholders. An annu..

  Subscriptions were originally recorded as liability

Better Publications, sold annual subscriptions to their magazine for $42,000 in December, 2013. The magazine is published monthly. The new subscribers received their first magazine in January, 2014. Collapse question part (a) What adjusting entry sho..

  What is total annual expense per unit under the pessimistic

$27.20 plus or minus 2% annual fixed cost are $32,500, and depreciation is $,400 per year. What is total annual expense per unit under the pessimistic scenario

  Compute the unit product cost for year one

Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable costs per unit: Manufacturing:  Compute the unit product cost for year 1, year 2, and year 3. . Pre..

  What is target rate of return on assets

Target Corporation in 2007 reported net income of $2.9 billion, net sales of $61.5 billion, and average total assets of $41.0 billion. What is Target’s asset turnover ratio? What is Target’s rate of return on assets?

  Question the december 31 2012 condensed balance sheets of

question the december 31 2012 condensed balance sheets of pym corp. and its 90 percent-owned subsidiary sy corp. are

  Which of four alternatives has the highest present value

Tyson Trucking won a settlement in a lawsuit and was offered four different payment alternatives by the defendant's insurance company. The interest rate is 6%. Ignoring tax considerations, which of the following four alternatives has the highest pres..

  Discuss differences between vertical and horizontal analysis

Discuss the differences between vertical and horizontal analysis. Which would you prefer? Why or why not?

  How easily can two companies meet their long term obligation

As for times interest earned ratio, company A is 20.96, company B is 26.13. How easily can the two companies meet their long term obligations?

  Prepare a bank reconciliation statement

Prepare a Bank Reconciliation Statement as at the end of June 20XX and describe how to maintain a petty cash system in line with organisational policy.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd