After-tax cost of debt=yield to maturity*(1-tax rate)
=9*(1-0.25)
=6.75%
WACC=Respective costs*Respective weight
12.9=(6.75*0.4)+(0.6*Cost of common equity)
Cost of common equity=(12.9-2.7)/0.6
=17%
Pearson Motors has a target capital structure of 40% debt and 60% common equity, with no...
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 11.40%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
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 12%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 10.40%. What is Pearson's cost of common equity?
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 10%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 13.80%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
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 8%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 12.60%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. ______%
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 11%, 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
COST OF COMMON EQUITY 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 11%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 14.30%. What is Pearson's cost of commor equity? Do not round Intermediate calculations. Round your answer to two decimal places
Pearson 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 25%. Pearson's CFO estimates that the company's WACC is 12.10%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
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 11%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 10.90%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
Pearson 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 25%. Pearson's CFO estimates that the company's WACC is 12.60%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
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 11%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 10.60%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. % ?