10.08

4. Problem 10.00 (Cost of Common Equity and WACC) ebook 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 12, and its marginal tax rate s 40%. The current stock price it pos22 50. The last dividend was Du - $2.00, and it is expected to grow at a constant rate. What is its cost of common equity and its WACC? Do not round Intermediate calculations. Round your answers to two decimal places a. b. WACC