Problempercy motors has a target capital structure of 35, Ask an Expert

Finance

Problem:

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 9%, and its tax rate is 40%. Percy's CFO estimates that the company's WACC is 14.80%.

Required:

Question: What is Percy's cost of common equity? Round your answer to two decimal places.

Note: Please show the work not just the answer.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91148773

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