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10-3 COST OF COMMON EQUITY Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield

10-3 COST OF COMMON EQUITY Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the companys outstanding bonds is 9%, and its tax rate is 25%. Pearsons CFO estimates that the companys WACC is 10.50%. What is Pearsons cost of common equity?

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