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10.08 (cost of common equity and wacc) 2. Problem 10.08 (Cost of Common Equity and WACC) Palencia Paints Corporation has a target capital structure of

10.08 (cost of common equity and wacc)
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2. Problem 10.08 (Cost of Common Equity and WACC) Palencia Paints Corporation has a target capital structure of 25% debt and 75% common equity, with no preferred stock. Its before-tax cost of debt is 11%, and its marginal tax rate is 25%. The current stock price is P0=$29,00. The last dividend was D0=$3.50, and it is expected to grow at a 5% constant rate, What is its cost of common equity and iss WACC? Do not round intermediate calculations. Round your answers to two decimal places. r= % WACC =

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