Question
Cost of Common Equity Percy Motors has a target capital structure of 40% debt and 60% common equity, with no preferred stock. The yield to
Cost of Common Equity
Percy 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 10%, and its tax rate is 40%. Percy's CFO estimates that the company's WACC is 13.20%. What is Percy's cost of common equity? Round your answer to two decimal places.
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Cases In Healthcare Finance
Authors: Louis C. Gapenski, George H. Pink
4th Edition
1567933424, 978-1567933420
