What is cost of common equity and wacc

Assignment Help Financial Management

Reference no: EM131595153

Cost of Common Equity and WACC

Patton Paints Corporation has a target capital structure of 45% debt and 55% 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 = $21.00. The last dividend was D0 = $3.75, and it is expected to grow at a 8% constant rate. What is its cost of common equity and its WACC? Round your answers to two decimal places.

rs = %

WACC = %

Reference no: EM131595153

Questions Cloud

Generate annual net cash flows : A capital project requires a initial cash outlay of $600,000. The project is expected to generate annual net cash flows of $80,000 for the next 25 years

Compute the contribution margin for greenside clinic : Greenside clinic has revenue totaling $3,500,000. The clinic has costs totaling $3,450,000.Of this amount 40%is variable cost and 60% is fixed cost.

Compute the percentage error in the approximation : How many ways are there of choosing, with order, the even integers out of the integers 1 through 12?

Structure the strategic planning : Ascertain the importance of strategic planning for an organization. suggest one (1) strategy you may use to structure the strategic planning session

What is cost of common equity and wacc : Patton Paints Corporation has a target capital structure of 45% debt and 55% common equity, with no preferred stock. What is cost of common equity and WACC.

Identify relatively risky areas that indicate the need : Perform analytical procedures to help you identify relatively risky areas that indicate the need for further attention during the audit, if any.

What is evanec cost of retained earnings and rs : The Evanec Company's next expected dividend, D1, is $3.36; its growth rate is 5%; What is Evanec's cost of retained earnings, rs?

Should this project be accepted or rejected based on irr : Should this project be accepted or rejected based on IRR? Why?

How do you calculate the payback period : How do you calculate the payback period for a 50,000 dollar student loan with an interest rate of 5%?

User Account

All Pages