What is its cost of common equity and its wacc

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Patton 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 10% and its marginal tax rate is 40%. The current stock price is P0 = $21.00. The last dividend was D0 = $2.75, and it is expected to grow at a 5% constant rate. 3

What is its cost of common equity and its WACC? Round your answers to two decimal places.

Reference no: EM13274065

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