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Business, 11.11.2020 18:10 flowerchild44

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 8%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 12.20%. What is Pearson's cost of common equity? Round your answer to two decimal places.

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Pearson Motors has a target capital structure of 40% debt and 60% common equity, with no preferred s...
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