7. Problem 10.08 (Cost of Common Equity and WACC) E eBook 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 11%, and its marginal tax rate is 25%. The current stock price is Po = $23.50. The last dividend was Do = $3.50, 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 your answers to two decimal places. % WACC = % 8. Problem 10.09 (WACC) eBook The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 14%, its before-tax cost of debt is 12%, and its marginal tax rate is 25%. Assume that the firm's long-term debt sells at par value. The firm's total debt, which is the sum of the company's short-term debt and long-term debt, equals $1,117. The firm has 576 shares of common stock outstanding that sell for $4.00 per share. Assets Liabilities And Equity Cash $ 120 Accounts payable and accruals $ 10 Accounts receivable 240 Short-term debt 47 Inventories 360 Long-term debt 1,070 Plant and equipment, net 2,160 Common equity 1,753 Total assets $2,880 Total liabilities and equity $2,880 Calculate Paulson's WACC using market value weights. Do not round intermediate calculations. Round your answer to two decimal places. %