Question: Textbook problem: David Ortiz Motors has a target capital structure of 40% debtand 60% equity. The yield to maturity on the company'soutstanding bonds is 9%

Textbook problem:

David Ortiz Motors has a target capital structure of 40% debtand 60% equity. The yield to maturity on the company'soutstanding bonds is 9% and the company's tax rate if 40%. Ortiz's CFO has calculated the company's WACC as 9.96%. Whatis the company's cost of equity capital?

I have the WACC formula...however, am not seeing that I haveenough info to compute this. Can you help me set thisup?

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