Business, 05.05.2020 22:40 dpierc16

Pearson Motors has a target capital structure of 45% debt and 55% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 12%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 10.70%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.

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Pearson Motors has a target capital structure of 45% debt and 55% common equity, with no preferred s...

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