Question
#3 Pearson Motors has a target capital structure of 45% debt and 55% common equity, with no preferred stock. The yield to maturity on the
#3
Pearson Motors has a target capital structure of 45% debt and 55% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 10%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 11.30%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
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Cases In Healthcare Finance
Authors: Louis C. Gapenski
3rd Edition
1567932444, 9781567932447
