Pearson motors has a target capital structure of 30 debt, Ask an Expert

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Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 8%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 13.40%. What is Pearson's cost of common equity?

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Financial Management, Finance

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