Question
chapter 10.1 Pearson Motors has a target capital structure of 40% debt and 60% common equity, with no preferred stock. The yield to maturity on
chapter 10.1
Pearson Motors has a target capital structure of 40% debt and 60% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 11%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 10.50%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
%
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Investments An Introduction
Authors: Herbert B. Mayo
13th Edition
0357127951, 978-0357127957
