Pearson Motors has a target capital structure of $30\%$ debt and

$70\%$ common equity, with no preferred stock. The yield to maturity

on the company's outstanding bonds is $12\%,$ and its tax rate is $40\%.$

Pearson's CFO estimates that the company's WACC is $13\mathrm{.}00\%.$ What is

Pearson's cost of common equity? Do not round intermediate

calculations. Round your answer to two decimal places.$$