Answer:
Ford's weighted average cost of capital is 8.22 %
Explanation:
Weighted Average Cost of Capital (WACC) is the minimum return that the company expect from a project. It shows the risk of the company.
Calculation of WACC
WACC = Cost of equity + Cost of preferred stock + Cost of debt
Capital Source Market Values Weight Cost Total Cost
equity $ 7 billion 29.17% 13.6% 3.97 %
preferred stock $ 2 billion 8.33% 12% 1.00 %
debt $ 15 billion 62.50% 5.2 % 3.25%
Total $ 24 billion 8.22 %
Cost of equity = Risk free rate + Beta × Risk Premium
= 4% + 1.2 × 8%
= 13.6%
Cost of preferred stock = Dividend/Market Price
= $ 3/ $ 25 × 100
= 12%
Cost of debt = interest × (1- tax rate)
= 8% × (1-0.35)
= 5.2 %
The best and most correct answer among the choices provided by the question is the third choice. A priority for an insurance coverage would be that a planned expense for which you budget. <span>I hope my answer has come to your help. God bless and have a nice day ahead!</span>
Answer:
Japan
Explanation:
Data provided in the question
Japan Nominal interest rate = 2.0%
U. S Nominal interest rate = 4.0%
Japan inflation rate = 0.50%
U.S inflation rate = 3.0%
Now the formula to compute the real interest rate is
Real interest rate = Nominal interest rate - inflation rate
For Japan, it is
= 2% - 0.50%
= 1.50%
For U.S, it is
= 4.0% - 3.0%
= 1.0%
So as we can see that highest rate interest rate is 1.50% i.e of Japan
Answer:
True
Explanation:
A company manager should be able to appraise its operations profit and capital used to generate the profit.
