Cost of common equitypercy motors has a target capital, Ask an Expert

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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 8%, 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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Financial Management, Finance

Category:- Financial Management
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