Question
David Ortiz Motors has a target capital structure of 40% debt and 60% equity. The yield to maturity on the company's outstanding bonds is 12%,
David Ortiz Motors has a target capital structure of 40% debt and 60% equity. The yield to maturity on the company's outstanding bonds is 12%, and the company's tax rate is 40%. Ortiz's CFO has calculated the company's WACC as 9.92%. What is the company's cost of equity capital? Round your answer to two decimal places.
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Managing Finance A Socially Responsible Approach
Authors: D. Crowther
1st Edition
0750661011, 978-0750661010
