What is its cost of common equity and its wacc

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Question - Palencia 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 25%. The current stock price is P0 = $20.50. The last dividend was D0 = $2.25, and it is expected to grow at an 8% constant rate. What is its cost of common equity and its WACC?

Reference no: EM133168472

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