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Pearson cost of common equity

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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 11%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 15.00%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.

Reference no: EM132491773

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