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 10.56%. What is the company's cost of equity capital? Round your answer to two decimal places.
%
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Aircraft Finance Strategies For Managing Capital Costs In A Turbulent Industry
Authors: Bijan Vasigh, Reza Taleghani, Darryl Jenkins
1st Edition
1604270713, 9781604270716
