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7. Problem 10.08 (Cost of Common Equity and WACC) eBook Palencia Paints Corporation has a target capital structure of 25% debt and 75% common equity,

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7. Problem 10.08 (Cost of Common Equity and WACC) eBook 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 13%, and its marginal tax rate is 25%. The current stock price is Po = $30.00. 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

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