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Pearson Motors has a target capital structure of 40% debt and 60% common equity, whth no preferred stock. The yield to maturity on the company's

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Pearson Motors has a target capital structure of 40% debt and 60% common equity, whth no preferred stock. The yield to maturity on the company's outstanding bonds is 10%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 10.10%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places: Continue without saving The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 6% per year. Callahan's common stock currently sells for $28.25 share; its last dividend was $2.00; and it will pay a $2.12 dividend at the end of the current year. a. Using the DCF approach, what is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. \% b. If the firm's beta is 0.8 , the risk-free rate is 3%, and the average return on the market is 12%, what wil be the firm's cost of common equity using the CaPM approoch? Round your answer to two decimal places. % c. If the firm's bonds earn a return of 10%, based on the bond-yleld-plus-risk-premium approach, what will be f,? Use the judgmental risk premium of 4$ in your calculations. Round your answer to two decimal places. d. If you have equal confidence in the inputs used for the three approaches, what is your estimate of Caliahan's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. The Holmes Company's currently outstanding bonds have an 8% coupon and a 14% yieid to maturity. Holmes believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 25%, what is Hoimes' after-tax cost of debt? Round your answer to two decimal places. % Continue without saving Torch Industries can issue perpetual preferred stock at a price of $59.50 a share. The stock would pay a constant annual dividend of $6.00 a share. What is the company's cost of preferred stock, rp ? Round your answer to two decimal places. Continue without saving

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