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 25% debt and 75% common equity, with no preferred stock, lits before-tax cost of debt is 8%, and its marginal tax rate is 25%. The current stock price is P0=$24.50. The last dividend was D0=$3.75, and it is expected to grow at a 4% constant rate. What is its cost of common equity and its WACC? Do not round intermediate calculations. Round yout answers to two decimal ploces. rs=% WACC =% Continue without saving