Calculate cost of common equity


Question: Percy Motors has a target capital structure of 40 percent debt and 60 percent common equity, with no preferred stock. The yield to maturity on the firm's outstanding bonds is 9 percent, and its tax rate is 40 percent. Percy's CFO estimates that the firm's WACC is 9.96 percent. Calculate percy's cost of common equity?

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Cost Accounting: Calculate cost of common equity
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