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 10%,
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 10%, and the company's tax rate is 25%. Ortiz's CFO has calculated the company's WACC as 10.8%. What is the company's cost of equity capital? Round your answer to the nearest whole number. %
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Fundamentals Of Futures And Options Markets
Authors: John C. Hull
5th Edition
0131445650, 9780131445659
