Question
Pearson Motors has a target capital structure of 35% debt and 65% common equity, with no preferred stock. The yield to maturity on the company's
Pearson Motors has a target capital structure of 35% debt and 65% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 8%, 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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The Handbook Of Credit Risk Management
Authors: Sylvain Bouteille, Diane Coogan-Pushner
2nd Edition
1119835631, 978-1119835639
