Question
Pearson Motors has a target capital structure of 40% debt and 60% common equity, with no preferred stock. The yield to maturity on the company's
Pearson Motors has a target capital structure of 40% debt and 60% 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 11.10%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
____ %
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Extinction Governance Finance And Accounting
Authors: Jill Atkins, Martina Macpherson
1st Edition
0367492989, 978-0367492984
