Question
Cameron Corp. has a target capital structure of 40% debt and 60% equity. The companys tax rate is 30% and the yield to maturity on
Cameron Corp. has a target capital structure of 40% debt and 60% equity. The companys tax rate is 30% and the yield to maturity on their outstanding bonds is 12%. If their weighted average cost of capital is 9.6%, what is the company's cost of common equity?
a. 5.8%
b. 9.3%
c. 10.4%
d. 13.6%
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Accounting Principles
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso
12th edition
1119132223, 978-1-119-0944, 1118875052, 978-1119132226, 978-1118875056
