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eBook Pearson Motors has a target capital structure of 40% debt and 60% common equity, with no preferred stock. The yleld to maturity on the

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eBook Pearson Motors has a target capital structure of 40% debt and 60% common equity, with no preferred stock. The yleld to maturity on the company's outstanding bonds is 12%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 12.70%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. %

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