What is the companys cost of equity, Financial Management

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What is the companys cost of equity

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 40%. Ortiz's CFO has calculated the company's WACC as 8.90%. What is the company's cost of equity capital? Round your answer to two decimal places.

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