Problem:
Percy 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 9%, and its tax rate is 40%. Percy's CFO estimates that the company's WACC is 14.80%.
Required:
Question: What is Percy's cost of common equity? Round your answer to two decimal places.
Note: Please show the work not just the answer.