Question
Percy 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
Percy 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 9%, and its tax rate is 40%. Percy's CFO estimates that the company's WACC is 13.50%. What is Percy's cost of common equity? Round your answer to two decimal places.
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Personal Finance Building Your Future
Authors: Robert Walker, Kristy Walker
2nd Edition
0077861728, 9780077861728
