Palencia Paints Corporation has a target capital structure of 30% debt and 70% common equity, with...

Palencia Paints Corporation has a target capital structure of 30% debt and 70% common equity, with no preferred stock. Its before-tax cost of debt is 13%, and its marginal tax rate is 40%. The current stock price is P₀ = $31.50. The last dividend was D₀ = $2.25, and it is expected to grow at a 5% constant rate. What is its cost of common equity and its WACC? Round your answers to two decimal places. Do not round your intermediate calculations.

r_s = %
WACC = %

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jeff jeffy answered 1 year ago

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