Question
David Ortiz Motors has a target capital structure of 35% debt and 65% equity. The yield to maturity on the company's outstanding bonds is 8%,
David Ortiz Motors has a target capital structure of 35% debt and 65% equity. The yield to maturity on the company's outstanding bonds is 8%, and the company's tax rate is 40%. Ortiz's CFO has calculated the company's WACC as 9.20%. What is the company's cost of equity capital? Round your answer to two decimal places.
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Understanding Healthcare Financial Management
Authors: Louis C. Gapenski, George H. Pink
6th Edition
1567933629, 9781567933628
