Question
Percy Motors has a target capital structure of 49.20% debt and 50.80% common equity, with no preferred stock. The yield to maturity on the companys
Percy Motors has a target capital structure of 49.20% debt and 50.80% common equity, with no preferred stock. The yield to maturity on the companys outstanding bonds is 9.60%, and its tax rate is 51.50%. Percys CFO estimates that the companys WACC is 11.7396%. What is Percys cost of common equity?
| a) | 13.8117% |
| b) | 22.3200% |
| c) | 14.8800% |
| d) | 9.4488% |
| e) | 18.6000% |
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The Oxford Handbook Of Quantitative Asset Management
Authors: Bernd Scherer, Kenneth Winston
1st Edition
0199553432, 978-0199553433
