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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 11%, and the company's tax rate is 25%. Ortiz's CFO has
calculated the company's WACC as 12.3%. What is the company's cost of equity capital?
Round your answer to the nearest whole number. %

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  • 1. 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 11%, and the company's tax rate is 25%. Ortiz's CFO has calculated the company's WACC as 12.3%. What is the company's cost of equity capital? Round your answer to the nearest whole number. %