Computing the company cost of equity capital

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Reference no: EM131965393

Question: David Ortiz Motors has a target capital structure of 30% debt and 70% equity. The yield to maturity on the company's outstanding bonds is 8%, and the company's tax rate is 40%. Ortiz's CFO has calculated the company's WACC as 11.84%. What is the company's cost of equity capital? Round your answer to two decimal places.

Reference no: EM131965393

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