What is pearson cost of common equity

Assignment Help Financial Management

Reference no: EM131923952

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 8%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 13.50%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.

Reference no: EM131923952

Questions Cloud

What is holmes after-tax cost of debt : If its marginal tax rate is 35%, what is Holmes's after-tax cost of debt? Round your answer to two decimal places.

Components of the cash flow of mortgage loan : What are the components of the cash flow of a mortgage loan?

What is the company target debt-equity ratio : Fama's Llamas has a weighted average cost of capital of 12 percent. What is the company's target debt-equity ratio?

What would be cost of equity from new stock : If the company issued new stock, it would incur a 15% flotation cost. What would be the cost of equity from new stock?

What is pearson cost of common equity : Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. What is Pearson's cost of common equity?

How much was financial mistake investing : In dollars, how much was the financial mistake investing in the 2025 target fund?

Locational arbitrage and triangular arbitrage ensures : Assume that locational arbitrage and triangular arbitrage ensures that spot exchange rates are properly aligned.

Study the desirability of installing some new equipment : Pizza Planet Co. paid a consultant to study the desirability of installing some new equipment.

Analyzing and interpreting equity method investments : Analyzing and Interpreting Equity Method Investments. What amount of income from investments does Concord report?

User Account

All Pages