Question
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
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 11%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 11.70%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
= ?%
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Climate Finance Theory And Practice
Authors: Anil Markandya, Ibon Galarraga, Dirk Rübbelke
1st Edition
9814641804, 978-9814641807
