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​%?

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 %

Terophone charge is debit or credit​

Joe received a W-2 from his employer that showed he earned $ 45,000 in wages last year. He received a
1099 -INT from his bank that showed he earned $ 500 in taxable interest last year. Joe is single and no one
can claim him as a dependent.
1
Wages salaries, and tips. This should be shown in box 1 of your Form) W-2
Anach your Form() W-2
1
Income
Attach
Form(s) W-2
here.
Enclose, but do
payment
2
Taxable interest. If the total is over $1.500. you can use Form 1040EZ
2
3 Unemployment compensation and Alaska Permanent Fund dividends (see instructions),
3
4
s
Add lines 1, 2 and 3. This is your adjusted gross income.
If someone can claim you (or your spouse if a joint retum) as a dependent, check
the applicable borſes) below and enter the amount from the worksheet on back
You
Spouse
If no one can claim you (or your spouse if a joint return), enter 510,000 if singles
$20,000 if married filing Jointly. See back for explanation
Subtract line from line 4. If line 5 is larger than line 4, cater-
This is your taxable income.
5
6
6
Use the 1040EZ form shown above to calculate Joe's taxable income for last year.
A. $ 0
B. $ 35,000
C. $35,500
D. 55.500

The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die-hard fans and casual fans. For a particular WeR2Loud concert, there are 1,000 die-hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50, 000, which includes the cost of the band, lighting, security, etc. How much profit will the concert promoters earn if they set the price of each ticket at $50?
A. $150, 000
B. $75,000
C. $25,000
D. $100, 000

If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we now have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company: Year 1 Year 2 Year 3 Year 4 High price $ 27.43 $ 26.32 $ 30.42 $ 37.01 Low price 19.86 20.18 25.65 26.41 EPS 1.35 1.58 1.51 1.85 Earnings are projected to grow at 9 percent over the next year. a. What is your high target stock price over the next year

Good Morning! Make sure to eat something for breakfast, drink some water, Stay healthy, and take care of yourself :) I care about y'all!

Which of the following is NOT a recommended method to
protect you from identity theft?
A. Expensive Specialty locking or monitoring service
B. Regularly Monitoring your credit report
C. Contacting lenders and credit bureaus to report inaccurate information
D. Place a credit freeze with the credit bureaus

Which of the following statements would be considered pros of globalization?

Increased competition between countries

Increased immigration of unskilled workers

Increased public funding for education and immigration of those citizens with education

Increased consumption of wide variety of goods leading to increased production

Yall what do u think my Artist's name should be?

Defenders of shifting cultivation say it is the best approach for the tropics because 2) _______
A) shifting cultivation is part of the cultural diversity of folk customs in the tropics.
B) permanently clearing fields and using fertilizers will destroy tropical soils.
C) shifting cultivation destroys less tropical rain forest than permanently clearing the land.
D) it requires a lot of land to feed a small number of people.
E) A, B, and C

Which one of the following could not be called income?

Jermaine and Kesha are married, file a joint tax return, have AGI of $82,500, and have two children. Devona is beginning her freshman year at State University during fall 2020, and Arethia is beginning her senior year at Northeast University during fall 2020 after having completed her junior year during the spring of that year. Both Devona and Arethia are claimed as dependents on their parents' tax return. Devona's qualifying tuition expenses and fees total $4,000 for the fall semester and Arethia's qualifying tuition expenses and fees total $6,200 for each semester during 2020. Full payment is made for the tuition and related expenses for both children during each semester. The American Opportunity credit available to Jermaine and Kesha for 2020 is: a.$2,500. b.$3,000. c.$5,000. d.$6,000.

If the natural rate of unemployment was 5 percent, the current unemployment rate was 6 percent, and potential GDP was $4,000 billion, then according to Okun's law the economy would have sacrificed

Megaline, Inc., with five divisions, follows the competitive form of the multidivisional structure. One division has not met the rate-of-return goals for the past year. Another division has exceeded the rate-of-return goals. The other three divisions met the rate-of-return goals. The headquarters office must decide where to allocate capital in the next year. Which of the following scenarios is the MOST likely? a. The highest-performing division will get the highest capital allocation because it has the best prospects for creating more wealth for the shareholders next year. b. All divisions will receive the same capital allocation for the next year because this organizational structure rewards divisional managers based on achievement of strategic goals. c. The average-performing divisions that met the rate-of-return goals will receive the highest allocation because their performance exactly matched corporate requirements. d. The poorest-performing division will get the highest capital allocation so that it can fix its problems and achieve the rate-of-return goal next year.

One advantage of a sole proprietorship is:

a-owner keeps all the profits.

b-unlimited liability.

c-a difficult creation process.

d-limited sources of funds.

If you buy an investment for $800 and then sell it for $1,000 ten months later, what is your annual return on investment (percentage)?

what would you do if you were offered a promotion that you were not certain about accepting? What factors would you take into account when making your desicion?​