What is its cost of common equity and its wacc

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Reference no: EM131572818

Palencia Paints Corporation has a target capital structure of 40% debt and 60% common equity, with no preferred stock. Its before-tax cost of debt is 8% and its marginal tax rate is 40%. The current stock price is P0 = $34.00. The last dividend was D0 = $2.00, and it is expected to grow at a 6% 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.

Rs = ?

WACC = ?

Reference no: EM131572818

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