Question
Problem 10-3 Cost of Common Equity Percy Motors has a target capital structure of 35% debt and 65% common equity, with no preferred stock. The
Problem 10-3 Cost of Common Equity
Percy 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 11%, 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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Principles Of Investments
Authors: Alan Marcus, Zvi Bodie, Michael Drew, Anup Basu, Alex Kane
1st Edition
0071012389, 978-0071012386
