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 9%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 10.50%. What is Pearson's cost of common equity? O 9.25% O 8.45% O 10.45% O 12.69% O 12.40%

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 9%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 10.50%. What is Pearson's cost of common equity? 9.25% 8.45% 10.45% 12.69% 12.40%