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What is the company cost of equity capital

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Reference no: EM132879424

Problem 1: David Ortiz Motors has a target capital structure of 40% debt and 60% equity. The yield to maturity on the company's outstanding bonds is 10%, and the company's tax rate is 25%. Ortiz's CFO has calculated the company's WACC as 10.8%. What is the company's cost of equity capital? Round your answer to the nearest whole number.

Reference no: EM132879424

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