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30-04-2024
Mathematics

Answered

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 10.80%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.

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