COST OF COMMON EQUITY Percy Motors has a target capital structure of 40% debt and 60% 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 9.96%. What is Percy’s cost of common equity?
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COST OF COMMON EQUITY Percy Motors has a target capital structure of 40% debt and 60% 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 9.96%. What is Percy’s cost of common equity?
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- The Cost of Equity and Flotation Costs Messman Manufacturing will issue common stock to the public for $30. The expected dividend and the growth in dividends are $3.00 per share and 5%, respectively. If the flotation cost is 10% of the issue’s gross proceeds, what is the cost of external equity, re?еВook Pearson Motors has a target capital structure of 45% debt and 55% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 12%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 11.90%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. %1. The Dumaguete Co. has an equity cost of capital of 17%. The debt to equity ratio is 1.5 and a cost of debt is 11%. What is the weighted average cost of capital of the firm? (Assume a tax rate of 33%) a. 15.52% b. 3.06% c. 13.40% d. 16.97% 2. Metrobank’s stock is currently trading at P25 per share. The stock’s dividend is projected to increase at a constant rate of 7 percent per year. The required rate of return on the stock is 10 percent. what is the stock’s dividend yield today? a. cannot be determined from the information provided b. 3% c. 10% d. 7% 3. What is the expected rate of return on a bond that pays a coupon rate of 9%, has a par value of P1,000, matures in five years, and is currently selling for P714? Round your answer to the nearest whole percent and assume annual coupon payments. a. 13% b. 18% c. 16% d. 17%
- Cost of Common Equity 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 12%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 11.70%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. A.A company finances its operations and growth opportunities, using common equity and debt. The debt-to-equity ratio of the CI Corp. is 0.2. If its cost of equity is 11%, and its pretax cost of debt is 4%, what comes closest to the company's WACC? The tax rate is 25%. 0000 14% 10% 6% 8.5%A company's capital structure consists of 25% debt and 75% common equity. The company has a 20% tax rate, and the cost of equity is 146. What is this company's difference in weighted average cost of capital (WACC) if the cost of debt is 6% at market value and 5% at book value and the cost of equity is 12 %? a. 0.19% b. 0.25% (b is correct, I just don't understand how.)c. 10% d. 11%
- Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 8%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 12.70%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. ? %Take It All Away has a cost of equity of 10.51 percent, a pretax cost of debt of 5.25 percent, and a tax rate of 21 percent. The company's capital structure consists of 67 percent debt on a book value basis, but debt is 27 percent of the company's value on a market value basis. What is the company's WACC? Multiple Choice 9.70% 8.79% 9.09% 12.20% 7.32%Take It All Away has a cost of equity of 10.45 percent, a pretax cost of debt of 5.21 percent, and a tax rate of 34 percent. The company's capital structure consists of 65 percent debt on a book value basis, but debt is 25 percent of the company's value on a market value basis. What is the company's WACC? Multiple Choice 8.17% 9.75% 8.70% 12.39% 9.14% Next < Prev 21 of 40
- 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 12%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 10.70%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. Hide Feedback IncorrectDavid Ortiz Motors has a target capital structure of 40% debt and 60% equity. The yield to maturity of its outstanding long-term debt securities is 9% and its tax rate is 40%. Ortiz's CFO calculated the company's WACC to be 9.96%. Based on the information, what is the company's cost of equity?Take It All Away has a cost of equity of 10.45 percent, a pretax cost of debt of 5.21 percent, and a tax rate of 21 percent. The company's capital structure consists of 65 percent debt on a book value basis, but debt is 25 percent of the company's value on a market value basis. What is the company's WACC? Multiple Choice ● O O O 9.14% 8.17% 12.39% 9.75% 8.87%