WACC = Wd×Rd×(1-t)+We×Ke
W is weights of respective portfolios
R is return on respective portfolios
Wd+We = 1
12.60% = 35%×9%×(1-25%)+65%×Ke
12.60% = 2.3625%+65%×Ke
Hence, cost of equity, Ke = 15.75%
*Please rate thumbs up
Pearson Motors has a target capital structure of 35% debt and 65% common equity, with no...
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 35% debt and 65% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 10%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 11.30%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
eBook Pearson Motors has a target capital structure of 35% debt and 65 % commaon equjty, 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 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 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 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 9%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 12.90%. 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 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 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 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. % ?
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 12%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 12.30%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.